India's union government has withdrawn temporary restrictions on the sale of petrol and diesel at retail fuel stations, reversing measures that had been introduced to prevent shortages amid concerns over global fuel supply.

In a letter issued Monday, the Ministry of Petroleum and Natural Gas informed state-run oil companies that the restrictions would be lifted effective July 1 following a review of petroleum supply across the country.

The government had imposed the limits on June 12, including a cap of 200 litres of high-speed diesel per customer per day, to discourage hoarding and black-market sales during a period of supply uncertainty.

The decision is expected to provide relief to farmers in Punjab, where recent power outages have increased reliance on diesel-powered irrigation pumps, leading to higher fuel demand. The earlier sales limits had created difficulties for some farmers during the outages.