Checked against the Marketing Discipline Guidelines 2024 (Ver. 1, effective 24.10.2024) on 15 October 2026. Published by MDG Services on 16 October 2026.
The action for each class
| Class | First instance | Second instance | Third instance |
|---|---|---|---|
| Minor MDG 8.4 | Warning-cum-guidance letter | Rs 10,000 per irregularity | Rs 25,000 per irregularity, from the third instance on |
| Major, standard ladder MDG 8.3 | 15 days' suspension of sales and supplies | 30 days' suspension | Termination of the dealership |
| Major, normal fuel intentionally sold as branded fuel MDG 8.3 | Recovery of the differential price since the last inspection | Termination | n/a |
| Major, automation breach MDG 8.3 | Rs 1,00,000 | Rs 2,00,000 and 7 days' suspension | Termination |
| Critical MDG 8.2 | Termination | n/a | n/a |
The miscellaneous minor items (a to h in 8.4) found together count as one irregularity when the action is decided MDG 8.4.
Not sure which class your lapse falls in? See critical, major or minor: which is my lapse.
Why a pump gets suspended: four main reasons
| Kind of stop | When it happens |
|---|---|
| Lab-test stop of all products | A density or filter paper test fails MDG 2.5(K), the reference density is missing MDG 5.1.9, or a positive stock variation passes the limit MDG 5.1.11. Sales and supplies of every product stop at once and samples go to the lab. For a mobile lab failure, see the mobile lab page. |
| One nozzle or dispensing unit stops | A seal, totaliser or fitting finding stops and seals the unit MDG 5.1.2(b) MDG 5.1.3 MDG 5.1.4. Short delivery beyond the legal limit with seals intact stops the nozzle until it is recalibrated and re-stamped MDG 5.1.2(a). |
| Penalty suspension | 15 or 30 days for most major irregularities, or 7 days with the second automation step MDG 8.3. |
| Unpaid-fine suspension | Starts on the 31st day, counted from the company's fine notice MDG 8.7. |
Two smaller stops exist. A nozzle that delivers short but inside the permitted band is recorded and keeps selling. The dealer is advised to recalibrate and re-stamp it within 15 days of the finding, or its sales stop until done MDG 5.1.2(a). If negative stock variation passes the limit and the dealer's explanation is not found satisfactory, supply is suspended MDG 5.1.11. Two more stops come from repairs, not from a penalty: a major pipeline leak, where the dealer is advised to suspend sales MDG 4.3(b), and ethanol outside the desired range in a tank MDG 4.3(c).
After a finding
- Notice and reply: the show cause notice process.
- Second or third instance, or several findings together: how repeat offences are counted.
- A fine not paid in time: the unpaid-fine timeline.
- Termination: it can be appealed within 30 days of receiving the order, and the appeal in MDG is for termination only MDG 8.9. See the appeal.
Kerosene wholesale dealers have their own lists and penalties MDG 8.10. See kerosene dealers.
General information, not legal advice. For your own notice, speak to an advocate or your oil company.
In this section
Questions dealers ask
01What is the meaning of MDG penalty?
It is the action an oil company takes against a dealer once an irregularity from Chapter 5 of MDG 2024 is established: a letter, a fine, recovery of the differential price, a suspension of sales and supplies, or termination of the dealership MDG 8.2 MDG 8.3 MDG 8.4.
02Is the first penalty always a warning?
No. Only minor irregularities start with a warning-cum-guidance letter MDG 8.4. A first major irregularity usually means 15 days' suspension MDG 8.3, and a first critical irregularity means termination MDG 8.2.
03Why can a petrol pump be suspended under MDG?
Four main things can stop sales: a lab-test stop, a stop of one nozzle or unit, a penalty suspension and an unpaid fine. The suspension table on this page shows when each applies MDG 5.1.9 MDG 8.3 MDG 8.7.
Read the official text: Marketing Discipline Guidelines 2024 (PDF on Bharat Petroleum's website) (also published on iocl.com).
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