Customers not to pay card transaction fee at fuel stations

Banks and oil marketing companies will bear the transaction charges on fuel sold at petrol pumps on credit and debit cards.

Oil Minister Dharmendra Pradhan told reporters on Thursday that consumers would not be burdened with the Merchant Discount Rate (MDR).

Petrol pumps will also be taken out of its purview. Banks and oil marketing companies will decide on a mechanism to share the costs, he said.

Pradhan attended a meeting convened by the Department of Financial Services and the Ministry of Finance to discuss the imbroglio over who pays.

MDR is a bank levy on merchants for enabling payments through credit and debit cards. This was being passed on to consumers. After demonetisation, the government, in a bid to promote digital payments, had waived the charge till December 30.

After the date, banks decided to pass on the MDR to petrol pump operators since the government mandate was that consumers should not be burdened with any additional charge for using cards.

Petrol pump owners had threatened to stop accepting card payments, forcing the government to broker a settlement.

How much?
A transaction fee of 1% is charged on credit card purchases of fuel at petrol pumps. On debit card purchases, the fee is between 0.25 and 1%. That is what oil marketing companies and banks will now bear.