In what will come as a relief for both consumers and fuel retail outlet operators, the ministry of petroleum and natural gas has announced that neither will have to bear the cost of digital transactions even after January 13.
“The petrol pump transaction fee is a business model between the banks and oil marketing companies which they will resolve,” oil minister Dharmendra Pradhan said in a release.
On Sunday, the All India Petroleum Dealers Association announced that fuel retailers would not accept card payments from midnight given some banks said they would charge up to 1% for every credit and debit card transaction. However, the National Democratic Alliance government stepped in to negotiate and the decision was initially deferred till 13 January.
There are around 53,000 fuel retail outlets in the country and post demonetisation, wherein Prime Minister Narendra Modi declared old Rs 500 and Rs 1,000 currency notes invalid, the digital transactions at fuel stations have gone up from 8-10% to around 35% of the total sales, M K Surana, chairman and managing director of state-run Hinduatan Petroleum Corp Ltd, had earlier told The Financial Express.
The move to not accept card payments could have potentially affected the government’s move to push the economy towards becoming less cash-dependent.
To promote cashless transactions, the fee—also known as merchant discount rate—was not being levied on buying fuel through debit or credit cards which was the norm pre-demonetisation. Though according to reports, some banks informed fuel retailers that the charge will be restored.
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