Iran war sets fuel on fire in India
- Quaid Najmi
- 2 hours ago
- 3 min read

Mumbai: Barely a week into the escalating war in the Middle East, India is already staring at the spectre of a serious fuel crisis - marked by supply anxieties, sudden policy jolts and steep price hikes that could ignite a fresh wave of inflation across the economy.
Industry bodies and consumers alike were rattled on Friday as a series of back-to-back directives from the country’s oil ecosystem triggered panic in the markets.
In a span of barely 24 hours, consumers got three major shocks. Firstly, an order suggesting priority to domestic LPG supplies, leaving commercial LGP users to fend for themselves. Secondly, a big blow in the form of a directive that petrol-diesel retailers must make advance payments to procure their daily fuel supplies from Oil Marketing Companies (OMCs).
As these sunk in, the LPG prices were sharply increased for both household and commercial consumers.
The cascade of decisions by the three state-run OMCs - Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL) and Indian Oil Corporation Ltd (IOCL) - reportedly invoking the Essential Commodities Act - sent tremors across the fuel retail sector.
However, after mounting concerns and frantic consultations, two of the controversial measures were put on hold, offering partial relief to the industry, said top players.
LPG Supply
The All India Petroleum Dealers Association (AIPDA) spokesperson Ali Daruwala said the Centre clarified late on Friday that commercial LPG supplies have not been stopped, easing fears among hotels, restaurants, industries and other bulk consumers.
“However, the government has today sharply increased LPG prices, which will hit users badly. The more worrying move was the directive mandating advance payments by fuel stations to the OMCs for their supplies. That would have destroyed many dealers, especially those outside major urban centres,” Daruwala said.
A second relief followed soon after. The Consortium of Indian Petroleum Dealers (CIPD) President Uday Lodh said the OMCs have withdrawn the advance payment diktat and restored the existing EOD (End-of-Day) settlement system.
“I raised the matter strongly with HPCL Executive Director (Retail) Debashish Basak, emphasising how such abrupt change in payment rules would be extremely difficult for dealers to comply with. I also made it clear that if advance payments are ever required, the OMCs must announce a proper transition schedule well in advance. They have agreed,” a relieved Lodh said.
Severe Impact
Industry representatives stressed that the fallout of this could have been severe, particularly for smaller dealers. India has around 90,000 fuel stations, of which barely 11 percent - roughly 10,000 outlets - are located in major urban centres.
Urban fuel pumps typically order at least one tanker daily of petrol and/or diesel - about 20-kiloLitres, depending on sales volumes. In contrast, fuel stations in rural and remote areas often lift barely one tanker a week, given their modest demand.
For such operators, the sudden requirement of advance payments could have triggered a severe cash-flow crisis and potentially disrupted fuel supplies in large parts of the country, stranding millions of vehicles.
LPG prices up, raise a stink
The bigger blow for 33.20 crore consumers came in the form of a sharp increase in LPG prices, effective Saturday, said Lodh and Daruwala - a move with far-reaching economic consequences.
The price of commercial LPG cylinders (19 kg) has been raised by Rs 115, while domestic LPG cylinders (14.2 kg) have been increased by Rs 60.
In Mumbai, commercial LPG prices have surged from Rs 1,720.50 to Rs 1,835.00, while domestic LPG cylinders now cost Rs 912.50, up from Rs 852.50.
The only marginal consolation is that Mumbai still remains the cheapest among the four metros.
Angry consumers exploded on social media, warning that the hike could fuel inflation, trigger cascading price increases in essential goods and services, and wreak havoc on already strained household budgets.
No Impact on petrol
Sources ruled out any immediate increase in petrol and diesel price as three fuel marketing companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) with bumper profits in earlier this year - had enough financial muscle to absorb such impact.
Retail petrol and diesel prices have been on a freeze since April 2022, with fuel retailers absorbing losses when crude prices are high and making profits when rates are low.





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