Chandigarh, Sept 21: Fuel stations across Punjab have decided to stop accepting Unified Payments Interface (UPI) transactions exceeding Rs 2,000 from October 16, protesting against the proposed levy of a 0.4 per cent Merchant Discount Rate (MDR) on high-value payments. The decision was taken by the Petrol Pump Dealers’ Association Punjab (PPDAP), which represents more than 4,000 retail outlets in the state.
The association has formally communicated its concerns to the Union Ministry of Petroleum and Natural Gas, the Ministry of Finance, and the leadership of major oil marketing companies. The association maintained that while regulatory authorities hold jurisdiction over tax structures and policy frameworks, petroleum retail outlets must be insulated from financial stress given their limited profit margins.
The move comes in response to a gazette notification issued by the Ministry of Finance on September 14, which mandates a 0.4 per cent MDR on person-to-merchant UPI transactions above Rs 2,000 starting October 15, capped at Rs 300 per transaction. The charges are designed to be levied on the merchants.
Highlighting the economic challenges faced by retailers, Paramjit Singh Doaba, state president of the association, stated, “Fuel stations in Punjab earn a margin of just 2 per cent on every litre of petrol, which is already less to manage operational costs such as electricity bills, staff salaries, maintenance and other expenses, leaving little room to absorb the additional transaction cost”. He noted that 30 to 40 per cent of daily buyers make high-value UPI transfers, creating a heavy cumulative expense for dealers.
“We have requested the Centre and oil companies to exempt fuel stations from the charges. Otherwise, we will have no option but to stop accepting such UPI payments,” Doaba affirmed.
Confirming the scope of the decision, Manjeet Singh, state secretary of the association, declared, “Fuel stations would continue accepting digital payments through credit and debit cards, as the MDR on those transactions is borne through the existing card payment companies.”
The proposed restriction is expected to affect commercial transport operators, taxicab owners, and long-distance commuters. Expressing concern over the potential disruption, Youth Azad Taxi Union state president Sharanjit Singh Kalsi asserted that long-distance taxi fuel bills often range between Rs 20,000 and Rs 30,000. He observed that non-cardholders cannot reasonably carry large amounts of cash, warning that the move could cause severe operational inconvenience to driver communities and travellers.
