No charges on card payments for customers, pumps: Pradhan

New Delhi: There will be no additional charges on digital transactions made at petrol stations, Petroleum Minister Dharmendra Pradhan announced on Monday even as petroleum dealers threatened to stop accepting credit and debit cards after Friday.

“Neither the customers nor petrol pumps will bear additional charges on digital transactions. The issue will be resolved,” Pradhan told reporters here after meeting Finance Minister Arun Jaitley over the matter.

“Regarding the issue, it is a business module between banks and oil marketing companies which they will resolve.”

“Government will abide by guidelines issued in February 2016 wherein it stated customers won’t bear extra charges on digital transactions,” Pradhan said.

The minister said the discussions between the petrol pump association and banks over card transaction charges does not affect consumers, since it focuses on sharing of the merchant discount rate (MDR) charges between petrol pumps and banks, none of which will be passed on to consumers.

The All India Petroleum Dealers Association (AIPDA) on Sunday announced that it would not accept payments through credit and debit cards from Monday in protest against various banks’ decision to levy additional transaction charge of up to one per cent on petrol pumps instead of on customers.

On Monday, AIPDA said pumps across the country will continue to accept cards till Friday, as banks have deferred charging transaction fee till then.

“Late on Sunday, banks communicated to us they will not levy the transaction fee on card payments till January 13. Accordingly, we have decided to continue accepting payments through cards till Friday,” AIPDA West Bengal unit General Secretary Saradindu Pal told IANS.

West Bengal Petroleum Dealers Association President Tushar Kanti Sen said: “We took the decision very late on Sunday night because some banks communicated they would not levy transaction fee till January 13 but some did not.

“We kept a close watch. Eventually, the Ministry requested us to defer the decision till January 13.”

In a letter to Jaitley, AIPDA President Ajay Bansal said HDFC and other banks would start charging one per cent on all credit card transactions and between 0.25 and 1 per cent on all debit card transactions from Monday.

“The same will be debited to petroleum dealers’ account and net transaction value will be credited to our account… This will lead to financial losses for the dealers,” Bansal wrote.

Jaitley on Monday said the Centre was discussing with all the stakeholders about the issue of levying transaction fee for payments through cards for selling and purchasing fuel.

“We are trying to resolve the issue,” he said.

The AIPDA decision not to accept payments through cards came at a time when the Centre had directed State-run oil companies to offer a 0.75 per cent discount on price of petrol and diesel to consumers paying by cards or mobile wallets to encourage people to move towards digital payments.

“This discount amount was supposed to be reimbursed to the dealers but is not being executed properly,” Pal said.

He said dealers have been working on a low margin and demanded raising the dealers’ commission to 5 per cent from the existing 3 per cent taking petrol and diesel together.

A Petroleum Ministry release subsequently clarified that there will be no additional levy on digital transaction at petrol stations even after Friday.

“The Government had issued guidelines in February 2016 stating that the Merchant Discount Rate (MDR) charge will not be passed on to the consumers and that the stakeholders will take appropriate steps to absorb the MDR charges,” it said.