Retail Diesel Blow to Amaravati: Centre Rejects AP Proposal

The Union government has rejected Andhra Pradesh’s proposal to source large volumes of diesel at retail prices for the construction of its planned capital, Amaravati , citing violations of existing rules and safety concerns.

The state had requested oil marketing companies to supply diesel through regular petrol pumps at retail rates to meet the high fuel demand for ongoing infrastructure works. However, Union Petroleum Secretary Neeraj Mittal declined the request, stating that such a move is not permitted under current petroleum regulations.

The proposal originated from an April 24 letter by Civil Supplies Commissioner K. Kannababu , who asked oil firms to allocate diesel from nearby retail outlets to avoid delays in construction. The intent was to reduce costs , as diesel purchased in bulk typically comes at a higher price. The state projected a requirement of over 27,500 kilolitres of diesel between April and July.

In its response, the Centre clarified that petrol pumps are not authorised to supply fuel in bulk quantities. Under the rules, fuel can only be dispensed directly into vehicle tanks or into approved containers within prescribed limits. Transporting large volumes from retail outlets not only breaches licensing norms but also raises serious safety risks.

The Centre further noted that such a system would violate provisions under fuel control regulations and could invite action under the Essential Commodities Act . It stressed that uniform standards must be maintained nationwide in fuel distribution and advised the state to withdraw its instructions issued to oil companies.

As an alternative, the Union government pointed out that authorised mechanisms already exist for bulk fuel supply to infrastructure projects. Diesel can be procured through direct sales channels or through approved doorstep delivery systems, both of which comply with legal and safety requirements.

Although the state government has not issued an official response, the ruling Telugu Desam Party has reiterated its commitment to continuing Amaravati’s development. Party spokesperson N. Vijay said the project is vital for the state and warned that any disruption in fuel supply could affect construction timelines. He added that Chief Minister N. Chandrababu Naidu is expected to take up the matter with the Centre.

Previously, the Chief Minister had warned oil companies against creating artificial shortages that could impact public services or government works, cautioning that strict action would be taken if supply disruptions occur.

With the Centre firmly rejecting the proposal, Andhra Pradesh may now have to rely on approved bulk procurement systems or seek policy-level intervention to ease costs. Ensuring uninterrupted fuel supply remains key to maintaining the pace of Amaravati’s construction.