State-owned Indian fuel retailers have told dealers they will require advance payments for gasoline and gasoil supplies nationwide, dealers said, citing mounting revenue losses at the refiners and retail companies. The move affects a large portion of the retail network: about 90% of India’s 101,470 fuel stations are linked to state refiners and retailers Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp.
Dealers said the refiners have stopped the short credit they previously extended-typically five days-and are now demanding payment upfront. The change follows a squeeze on margins after the rupee weakened and refinery “cracks” (the margin between crude oil and refined products) climbed to multi‑year highs, putting pressure on refiners’ retail businesses.
The disruption to global supplies through the Strait of Hormuz, and a surge in crude prices above $100 a barrel amid the US‑Israeli war on Iran, have pushed up international product values while India has kept retail pump prices unchanged to shield consumers, dealers said. The three state retailers did not respond to Reuters’ request for comment.
Dealers warned that the advance‑payment demand will strain their cash flows. “Dealers are very upset because we also run our business on credit, and some dealers sell fuel to the clients, such as government departments and transporters, on a credit basis,” said Ajay Bansal, president of the All India Petroleum Dealers Association, which represents about 92,000 fuel stations.
Industry sources say the combination of higher global prices, a weak rupee and the tightening of dealer credit could disrupt normal supplies and add financial stress across the downstream fuel distribution chain unless policy or pricing adjustments ease the pressure.
Original Source: https://www.firstpost.com/india/indian-oil-companies-seek-advance-payments-from-fuel-dealers-as-global-crude-prices-surge-13990340.html
Category: India
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Publish Date: 2026-03-17 13:33:00
