NEW DELHI - PETROL stations in cities across India ran dry on Friday as a strike for better pay by state oil employees entered a third day and talks with the government broke down.

'We had some discussions but we are yet to reach a conclusion,' Sarthak Behuria, the chairman of Indian Oil Corporation told reporters after overnight talks with the petroleum minister.

More than 45,000 employees at government-run oil companies halted work Wednesday to press for higher pay.

Petrol stations in many cities put up signs saying they had run out of stock, while motorists formed huge queues outside other filling stations.

Nearly two-thirds of gas stations in New Delhi were without petrol and diesel, and scores of flights were delayed because of refuelling difficulties.

Two oil company employees were reportedly released after being arrested briefly for instigating workers to stop work.

The Press Trust of India said the government was considering calling in the army to replace the striking workers and shift petroleum supplies from oil refineries to pumps.

Commuters in India's financial capital Mumbai struggled to get to work, as pumps ran dry, hitting thousands of taxis and auto-rickshaws that are a lifeline in the city.

Anthony Quadros, general secretary of the Bombay Taximen's Union which has more than 50,000 members in Mumbai, said only 200-300 taxis were on the road Friday morning.

'It's badly affected us because all the taxis and autorickshaws run on compressed natural gas (CNG). The supply of CNG has completely stopped,' he told AFP.

'There are about 132 CNG stations in Mumbai. All the stations are closed.'

The president of the Mumbai Petrol Dealers Association, Ravi Shinde, said around 60 per cent of petrol and diesel outlets in the city were already out of stock.

Many others could run dry by the end of the day, he added.

Mr Quadros feared for the livelihoods of his members, who are daily wage earners, and people who relied on them to get to work and to places like hospitals and schools.

He called on the federal government to step in immediately, warning that no taxis or auto-rickshaws would be on the road by Friday evening and even if the strike were called off, it could take at least 24 hours to get back to normal.

Anjan Roy, economic adviser at the Federation of Indian Chambers of Commerce and Industry, said the impact of the strike would be 'considerable' and could not have come at a worse time with the global economic slowdown making itself felt in India.

'This is very disruptive for the entire economy,' Mr Roy told AFP.

Petroleum Minister Murli Deora was expected to meet Prime Minister Manmohan Singh later on Friday to discuss the strike. -- AFP