Petrol Pumps Will Accept Cards For Now As Government Steps In

New Delhi: Petrol pumps across the country have decided to postpone till at least January 13 their protest against the banks' decision to levy an extra charge on credit and debit card transactions. The late evening turnaround came after the government stepped in. The petrol dealers had announced earlier that starting midnight, they would not accept the debit and credit cards of banks that would levy the extra charge.

The government, sources said, has assured the dealers that the merchant discount rate or MDR fee won't be applied till January 13. The intervention came after the petroleum dealers' association had written to Union finance minister Arun Jaitley, informing him about the sudden decision by the banks to levy the transaction charge and their resolution to refuse card payments.

"Retail outlet owners and consumers should not take any heat of any kind of surcharge. Government is suggested to negotiate between oil marketing companies and bankers because it's a business preposition. The issue will be resolve very soon. Oil marketing company is giving some subsidy," said Petroleum Minister Dharmendra Pradhan.

The decision by fuel dealers could have hit the consumers as well the government's efforts to push cashless transactions amid a nationwide cash shortage following the scrapping of Rs. 500 and 1,000 rupee notes.

"We want to help the government in the digital and cashless drive. Our margins are already less. We want them to compensate us," Ajay Bansal, chief of All-India Petroleum Dealers' Association, had said.he had named three banks - HDFC, ICICI and Axis Banks -- among those which had levied the extra charge.

Cashless transactions have gone up at petrol pumps since the government's demonetisation move announced on November 8.  To promote cash-less transactions, the government had waived the Merchant Discount Rate (MDR) on fuel purchase post demonetisation for consumers. But after the expiry of the 50-day window, the banks have decided to levy MDR on petrol pump owners.

In their letter to Mr Jaitley, the All India Petroleum Dealers' Association said since there has been no word of passing the charge to consumers, the dealers will sustain a loss.

The pumps have been notified that 1% charge will be levied on all credit card transactions and between 0.25% and 1% on all debit card transactions from January 9, 2017. The banks have quoted a circular issued by the Reserve Bank on December 16 as the reason for the extra charges, the letter said. It went on to add, "Banks are using this as an excuse to improve their bottom line through transactions at fuel stations."

In a statement to NDTV, ICICI Bank however said it wasn't among the banks that were going to charge transaction fees for card swipes from petrol pumps. "We are not charging any transaction fee on the card payment from tomorrow," a company spokesperson said.