Indian Fuel Retailers Seek Advance Payments from Dealers

State-owned fuel retailers in India have initiated a policy requiring advance payments for gasoline and gasoil deliveries to fuel pumps across the country. This move follows reports that these companies are incurring substantial revenue losses from retail operations due to a sharp rise in global energy costs. Roughly 90% of the country's 101,470 retail fuel stations are connected to state-controlled refiners and retailers, including Indian Oil Corporation Limited and Bharat Petroleum Corporation Limited, along with Hindustan Petroleum Corp. These refiners are facing severe financial pressure from a depreciating rupee and gasoline cracks that have reached multi-year highs. To shield the public from inflation, the government has refrained from raising retail prices even as global crude oil prices surpassed $100 per barrel. Market volatility has been exacerbated by supply disruptions in the Strait of Hormuz resulting from military tensions involving the United States, Israel, and Iran. Previously, these state-owned refiners provided a five-day credit period to dealers for fuel purchases. The sudden shift to advance payments has sparked concern among station operators who often provide credit to their own large-scale clients. Ajay Bansal, President of the All India Petroleum Dealers Association, which represents approximately 92,000 fuel stations, highlighted the challenges facing the industry. > "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." While the retailers have not officially commented on the change in payment terms, the policy shift reflects the growing economic burden on India's energy sector as global geopolitical instability continues to drive up costs.