India moves up deadline for use of old notes at petrol stations

An Indian customer pays for fuel with old 500 rupee notes at a petrol station in New Delhi on December 2, 2016, the last day on which the old currency can be used to purchase fuel. Dominique Faget / Show more

NEW DELHI // India said old notes would no longer be accepted at petrol stations after Friday, fuelling anger over the scrapping of high denomination bills that has caused an unprecedented cash crunch.

Indians thought they had until December 15 to use the old 500 rupee banknotes at filling stations but the government rushed forward the deadline on Thursday evening, giving millions of commuters barely 24 hours to spend the bills they had.

“This cannot be right. First you say we have until December 15 and suddenly now you are saying something else,” said RS Yadav, a government employee, as he waited for his turn on a rickety two-wheeler at a refuelling station in New Delhi.

Prime minister Narendra Modi sparked turmoil with his shock announcement last month that all 500 rupee ($7.30) and 1,000 rupee notes — some 86 per cent of all bills in circulation — would cease to be legal tender.

The sweeping abolition of all high-value notes was meant to bring billions in so-called “black”, or undeclared, money back into the formal system, ut the move has triggered chaos with long queues forming outside banks as people try to deposit their old notes or withdraw new ones.

Frequent rule changes in response to pressure from various groups and growing disorder have made matters worse.

Banks and ATMs have also been running out of cash with limits being put on withdrawals, forcing people to cut down their spending.

Those with old notes are allowed to deposit them into their bank accounts until the end of the year end but long bank queues had prompted many to use them up at gas stations.

Cash accounts for 90 per cent of transactions in India and the government has said it would take time before new bills are distributed.

“I was using my old notes up till now for filling petrol. Now I am dreading going to the bank. The government has no clue what we are being made to go through,” said Saurav Mallik, who works in the private sector.

The problem was not restricted to consumers, said Saima, a petrol station attendant. “I worry that there is going to be more confusion and chaos in the days ahead. Fights have already been breaking out.”

* Agence France-Presse