New Delhi, March 17 -- Pay up first, tank up later; at a time of crunch, that's the message from state-run oil marketers to fuel stations.

Oil marketing companies (OMCs) 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 supply chains worldwide. While Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL) began insisting on advance payments from last week, Indian Oil Corp. Ltd (IOCL) halted its five-day revolving credit policy on Monday, the people said on condition of anonymity.

The move gains significance since the three OMCs serve the majority of India's nearly 100,000 retail fuel pumps. Apart from the f...