Petrol pump dealers across Punjab have warned that they will stop accepting UPI payments above Rs 2,000 if a proposed merchant discount rate (MDR) or digital transaction charge is introduced on such transactions, as per a TOI report.
The Petrol Pump Dealers Association Punjab (PPDAP) has sought an exemption for petroleum retail outlets from any proposed MDR on UPI payments. The association has approached the Union ministry of petroleum and natural gas, ministry of finance and oil marketing companies (OMCs), arguing that dealers operating on thin margins would not be able to absorb any additional transaction costs.
Paramjit Singh Doaba, president of PPDAP, raised the issue in a letter addressed to Union ministers as well as the chairpersons and managing directors of Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), as reported by TOI.
Dealers seek exemption from UPI transaction charges
The association has urged the Centre to issue a specific order or advisory excluding petrol pumps from MDR on UPI transactions, including payments exceeding Rs 2,000.
PPDAP said petroleum dealers were already facing difficulties in meeting their operational expenses because of inadequate margins. It maintained that imposing additional digital transaction charges would further increase the financial burden on retail outlets.
The association referred to an extraordinary gazette notification issued by the Union ministry of finance on September 14 and sought protection for petroleum retail outlets before any new framework concerning UPI transaction charges is implemented.
Mohali dealers back proposed UPI payment limit
Ashwinder Singh Mongia, president of the Mohali Petrol Pump Dealers Association, said petrol pump dealers were already operating with “very thin margins” and should not be required to bear additional costs on UPI transactions.
“We cannot be expected to bear an additional charge on UPI transactions. We support the Punjab association’s decision that UPI payments above Rs 2,000 should not be accepted if MDR is imposed. Govt should exempt petrol pumps from such charges instead of passing the burden on to dealers,” Mongia said.
The Mohali association's position is in line with the stand taken by the state-level dealers' body, which has asked the Centre to ensure that petrol pumps are not brought under any proposed MDR framework for UPI transactions.
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Dealers warn of restrictions if exemption is denied
PPDAP has said that petroleum dealers would have no option but to restrict UPI payments above Rs 2,000 if the government does not grant the requested exemption.
The proposed restriction would apply only if the MDR or digital transaction charge is imposed, according to the dealers' association. The warning reflects the industry's concern that absorbing the proposed charges could add to the operating costs of petrol pumps.
The association has therefore called for petrol pumps to be specifically excluded from any new UPI transaction charge framework. It has also sought intervention from the concerned Union ministries and the three major public-sector oil marketing companies.
For now, the dealers' proposed move remains conditional on whether the exemption they are seeking is granted. The association has made clear that its stated course of action would be to stop accepting UPI payments above Rs 2,000 if the proposed charges are implemented without an exemption for petroleum retail outlets.
