Business

MSMEs Struggle with Diesel Procurement Limits Amid New Regulations

Micro, small, and medium enterprises (MSMEs) are facing significant challenges following the government's newly imposed limits on diesel procurement. According to V. Rangaswamy, president of the Coimbatore District Small Industries Association (CODISSIA), MSMEs that require between 200 to 600 litres of diesel daily are particularly impacted. The current ceiling of 200 litres per day, introduced on June 11, is inadequate for many businesses, forcing them to seek alternatives. Rangaswamy urges the government to raise the procurement limit for verified institutional consumers to support the sustainability of these essential enterprises.

MBN Business Reporter

MBN Business Reporter

Jun 19, 2026

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MSMEs Struggle with Diesel Procurement Limits Amid New Regulations

Key Takeaways

  • MSMEs face diesel procurement limits affecting operations
  • Call for higher procurement limits for verified consumers
  • Government urged to allow safe transport of diesel

This diesel procurement limit issue may sound like some dry policy matter,but for MSMEs,it is hitting daily work directly . And honestly,for small units already managing power cuts,cost pressure and staff issues,this is not small thing ah.

Micro,small, and medium enterprises (MSMEs) are now dealing with new regulations that put ceiling on how much high-speed diesel (HSD) they can buy in one day . Problem is,many of these businesses need somewhere between 200 to 600 litres daily just to keep operations moving.

According to V. Rangaswamy,the president of the Coimbatore District Small Industries Association (CODISSIA),current limit of 200 litres is just not enough for many units . And that sounds very believable because manufacturing,healthcare and education setups are not using diesel for luxury,no . They need it for power backup,production processes and material handling equipment.

And this is where rule starts looking disconnected from ground reality .

Many MSMEs cannot simply buy huge quantity and store it somewhere . They often don’t have space,proper storage setup or resources for bulk purchasing of HSD . So when local authorized retail outlets cannot give them enough diesel daily,operations get delayed,costs go up and efficiency takes hit.

Few things standing out clearly here:

  • MSMEs require between 200 to 600 litres daily for various operations .
  • Current procurement ceiling of 200 litres is insufficient for many businesses.
  • V. Rangaswamy is urging government to raise limit for verified institutions.

The solution being suggested is fairly practical only . Registered MSMEs,manufacturing units,hospitals and educational institutions should be allowed to procure up to 600 litres per day if they submit documents like GST registration or factory licenses.

That way,small institutional users can buy diesel in safe transport containers without needing dedicated bulk storage facilities . Rangaswamy has also suggested that oil marketing companies use digital verification mechanisms so process becomes easier and not messy for everyone involved .

And tbh,sector-specific exemptions from Ministry of Petroleum and Natural Gas could reduce pressure on these units . Because if small businesses cannot run machines,backup systems or essential equipment properly,productivity and profitability will obviously suffer.

But bigger question is whether rules are being made after understanding how MSMEs actually function day to day…

Source: thehindu-top
#MSMEs#diesel procurement#V. Rangaswamy#Coimbatore#government regulations#India#small businesses#high-speed diesel#operational challenges#energy needs

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