The Murco fuel terminal at Milford Haven is investigating how contaminated fuel was delivered to two west Wales supermarkets.
At least 17 cars broke down after motorists bought unleaded petrol from Morrisons forecourts in Carmarthen and Llanelli, and sales of unleaded petrol have been halted at the two stations.
A Murco spokesperson said a number of deliveries of unleaded fuel from Milford Haven might have been contaminated by water.
In a statement it said: "We are currently carrying out an investigation to determine whether such contamination has occurred at our site and its cause.
"Until we complete our investigation we will maintain additional controls to ensure that any fuel leaving the site is free of contamination."
Motor Fuel Group, which bought Murco’s retail business in October and has a supply deal with the Milford Haven terminal, said none of its company-owned or dealer sites had been affected.