Petrol pumps across Punjab will stop accepting UPI payments of more than Rs 2,000 from October 16 if the proposed Merchant Discount Rate (MDR) on high-value transactions comes into force. Petroleum dealers in Haryana, meanwhile, have sought the Centre’s intervention but are yet to take a final decision on stopping such payments.
The move by Punjab dealers comes in response to a proposed 0.4 per cent MDR on person-to-merchant (P2M) UPI transactions above Rs 2,000, with the charge capped at Rs 300 per transaction. According to a gazette notification issued by the Ministry of Finance on September 14, the proposed levy is scheduled to apply from October 15 and will be borne by merchants.
The Petrol Pump Dealers’ Association Punjab (PPDAP), which represents more than 4,000 fuel stations in the state, has opposed the proposed charge, saying dealers operating on thin margins would not be able to absorb the additional cost.
PPDAP executive member Ashwinder Mongia said a large number of customers, particularly truck drivers, use UPI to pay for fuel. He said dealers had approached the Centre and oil marketing companies seeking an exemption for petrol pumps.
“If our request is not accepted, we will have no option but to stop accepting UPI payments above Rs 2,000 from October 16,” Mongia said.
He added that petrol pumps would continue to accept payments through credit and debit cards.
According to dealers, petrol pumps earn a margin of around 2 per cent on every litre of petrol, while operating expenses, including staff salaries, electricity, maintenance and other costs, have risen substantially.
PPDAP state president Paramjit Singh Doaba said the proposed MDR would further squeeze dealers. He said the association had written to Union Petroleum and Natural Gas Minister Hardeep Singh Puri, Finance Minister Nirmala Sitharaman and the heads of oil marketing companies, seeking complete exemption for petroleum retail outlets.
The dealers have warned that failure to withdraw the proposed charge would leave them with no option but to restrict high-value UPI payments.
The issue has also reached Haryana. The All Haryana Petroleum Dealers Association (AHPDA) has written to the two Union ministers seeking immediate intervention. The association has argued that petroleum dealers, particularly those operating low-volume outlets, would be disproportionately affected by any additional transaction cost.
Haryana dealers have demanded exemption from the proposed MDR, continuation of zero-MDR UPI transactions in the fuel sector and protection from any additional payment burden.
Unlike their counterparts in Punjab, however, Haryana petroleum dealers have not yet announced a decision to stop accepting UPI payments above Rs 2,000.
