Middle East conflict: Oil companies seek advance payments from petrol pumps as global crude price surge squeezes margins

State-owned oil marketing companies have started asking petrol pump dealers to make advance payments for supplies of petrol and diesel, as refiners grapple with mounting revenue losses from retail fuel sales, according to a Reuters report.Nearly 90% of India’s about 1,01,470 fuel stations are linked to public sector refiners and retailers - Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation. Dealers said the change in payment terms comes at a time when refining margins for petrol and diesel have risen to multi-year highs and a weakening rupee has further strained company finances. Petrol and diesel prices in India have not been raised despite global crude oil climbing above $100 per barrel amid disruptions to supplies through the Strait of Hormuz linked to the US-Israel war on Iran. This has intensified pressure on the earnings of state-run refiners.Earlier, fuel retailers typically allowed a credit period of about five days for dealers to pay for supplies. The move towards advance payments has therefore caused concern among pump operators who also extend credit to certain customers.“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,” Ajay Bansal, president of the All India Petroleum Dealers Association, was quoted as saying.