India, March 17 -- Pay up first, tank up later-at a time of crunch, that's the message from state-run oil marketing companies to fuel stations.

Indian Oil Corp. Ltd., Hindustan Petroleum Corp. Ltd. and Bharat Petroleum Corp. Ltd. have suspended fuel on credit to limit offtake by retail outlets, four people aware of the development said, as the closure of Iran's Strait of Hormuz roils crude oil supply worldwide. While HPCL and BPCL began insisting on advance payments from last week, Indian Oil halted its five-day revolving credit policy on Monday, the people said on condition of anonymity.

The move gains significance since Indian Oil, HPCL and BPCL serve the majority of India's nearly 100,000 retail fuel stations. Apart from the sudden c...