No levy on cards at petrol pumps

Dealers exempted from paying fee

No levy on cards at petrol pumps

Consumers don’t have to pay a transaction fee on credit and debit card payments at petrol pumps, the government said on Monday.

The Centre and the oil companies are working on an arrangement to share the fee banks collect on such transactions, Petroleum Minister Dharmendra Pradhan said on Monday.
Dealers are also exempted from paying a fee for now.

The MDR (merchant discount rate) charge is levied on dealers under RBI guidelines, he explained.

“But who will take the hit? Banks and oil marketing companies are discussing this,” Pradhan told reporters after meeting Finance Minister Arun Jaitley to address the question.

“But I assure you there will be no levy on digital transactions at petrol stations even after January 13,” he said.

Dealers had threatened to stop selling fuel against cards on that date. The fee is a matter between banks and oil marketing companies, and they will find a way out, Pradhan said.

He rubbished the claim that oil marketing companies stand to lose Rs 5,000 crore on account of the 0.75% discount on card payments announced by the government.

The All-India Petroleum Dealers’ Association had said on Sunday three private banks had started levying the extra charge, and threatened a boycott of their cards.

The banks charge between 0.25% and 1% on credit and debit card transactions.
Separately, Jaitley said he had asked the secretary of the department of financial services to discuss the problem with the banks.

Crisis averted

On Sunday night, dealers had threatened not to sell fuel against card payments, in response to some private banks saying they would reintroduce the 1% transaction fee.

The government had announced a 50-day waiver of the MDR (merchant discount rate) on digital transactions after the November 8 note ban. The banks are keen to reintroduce the charge, now that the holiday is over.

The crisis triggered by the dealers’ announcement on Sunday was averted with the intervention of the petroleum minister, who spoke to representatives of banks, dealers and oil companies.

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