Himachal: Credit facility for fuel dealers withdrawn amid global oil crisis
Himachal Pradesh Petroleum Dealers Association said that the two-to-four-day credit facility earlier provided to dealers has been withdrawn.
The ripple effects of the global oil crisis triggered by the ongoing conflict in the Middle East are beginning to reach the common man, with major public sector oil companies discontinuing the credit facility extended to fuel dealers from today.
The decision comes in view of the tightening crude oil supply in the international market and the financial losses being incurred by oil marketing companies such as Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.
Confirming the development, the Himachal Pradesh Petroleum Dealers Association said that the two-to-four-day credit facility earlier provided to dealers has been withdrawn. Association president Sukumar Singh said while HPCL and BPCL have already discontinued the credit system, IOCL is also expected to adopt the same policy in the coming days.
Explaining the implications, Singh said that with the new arrangement, fuel will now be supplied strictly on a “cash-and-carry” basis. As a result, no credit facility will be extended to government departments, construction companies or private institutions that have been purchasing petrol and diesel on deferred payments.
He termed the situation unprecedented and attributed it partly to delays in payments from government departments to oil companies. “Due to non-timely payments, oil companies have now shifted to a cash-and-carry model. Customers will have to arrange immediate or advance payment for fuel purchases,” he said.
The move could potentially create operational challenges across sectors. Singh cautioned that constraints in the global supply chain coupled with the closure of credit facilities may disrupt trade and economic activities in the state. Transportation services and development projects could face delays if timely payments are not arranged.
Since a significant portion of fuel trade traditionally operates on credit, dealers say the new norm has further squeezed their margins amid already intense competition. Singh urged government departments and private consumers to cooperate during the crisis and ensure that banking or cash arrangements are made in advance to avoid disruption in fuel supplies.
