India’s state-owned fuel retailer has begun asking petrol pump dealers to make advance payments for gasoline and diesel supplies, as surging global oil prices squeeze their margins and lead to significant revenue losses. The move affects thousands of fuel stations across the country. Nearly 90% of India’s 101,470 fuel retail outlets are linked to state-run refiners such as Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited. These companies dominate India’s retail fuel distribution network.
Previously, fuel dealers were typically given around 5 days’ credit to pay for the petrol and diesel they received. However, rising international crude prices and currency pressures have forced refiners to tighten payment conditions and seek cash in advance before supplying fuel. Global oil prices have surged above $100 per barrel, largely due to supply disruption linked to geopolitical tensions in the Middle East and shipping concerns around the Strait of Hormuz. Despite the sharp rise in crude oil prices, India has not increased retail petrol and diesel prices to protect consumers from higher fuel costs. This price freeze has placed financial pressure on state-owned fuel retailers, who are absorbing losses while continuing to supply fuel at unchanged prices. As a result, companies have shifted part of the financial burden to declers by requiring upfront payments for fuel deliveries.
Also Read: Coal India Arm CMPDI Seeks $1.33B Valuation in IPO
Dealer groups have expressed concern about the new policy, noting that many petrol pumps also operate on credit when supplying fuel to customers such as transport, government departments, and businesses. Industry representatives say the change could create cash-flow challenges for smaller dealers if the high-oil-price environment persists. The situation highlights the growing pressure on India’s energy sector as global supply disruption and volatile crude prices continue to affect fuel pricing and distribution across the country.
