As many as 45,000 workers at state-run oil firms began an indefinite strike for higher wages on Tuesday that officials say could curtail fuel supplies.
The strike, announced only on Monday, will proceed as planned after last-minute talks with the government failed, Ashok Singh, a leader of the Oil Sector Officers' Association, an umbrella union for industry employees, told Reuters.
The strike by workers at companies including Oil and Natural Gas Corp (ONGC), Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp comes almost one year after a similar action, which was called off by the union only hours after it began.
"So far we are on strike. If the government invites us we will meet for talks again," said Singh.
The chairman of top refiner IOC said on Monday that the strike would force it to reduce production at its 10 refineries, which produce over 1.2 million barrels per day, enough to meet nearly half of India's oil demand.
IOC holds inventories equivalent to 30 days of consumption, he said, but petrol pumps could run dry in two to three days.
A union official has said that oil firms could suffer a daily loss of about 45 billion rupees.
In September 2006 the same union called for a strike, but suspended it almost immediately after the government promised to look into demands for higher wages. In December the oil union pulled out of planned strike by white-collar workers at India's largest telecoms firm and a state-run power utility.