Consumers, petrol pump owners won`t pay surcharge on card payments: Dharmendra Pradhan

New Delhi:  Neither the consumers, nor petrol pump owners will bear the burden of transaction surcharge on fuel purchases through debit or credit cards.

Oil Minister Dharmendra Pradhan clarified on Monday that Merchant Discount Rate(MDR)or petrol pump transaction fee is a business module between banks and oil marketing companies which they will resolve among themselves.

Nearly more than two thirds of petrol pumps across the country had threatened to stop accepting debit and credit cards over the surcharge from Monday, January 9, though subsequently deferred the move as banks postponed levying of transactions charges to January 13 after the government's intervention on Sunday.

The Oil Minister also confirmed that petrol pumps across the country will continue to accept debit and credit card payments even after January 13. 

The minister, on Sunday had suggested that banks and oil marketing companies sit and resolve dispute so that customers and petrol pump owners wouldn’t face any charges.

Earlier All India Petroleum Dealers Association protesting the levy of MDR charges by banks, had said that they will stop accepting card payments from Monday, January 9.

The association said that some of the banks like HDFC informed the association that they will be charging 1% on all credit card transactions and 0.25% to 1% on all debit card transactions from January 9.

Though, customers paid a transaction fee along with a surcharge for buying fuel with debit or credit cards before the note ban, in order to promote cashless transactions, the RBI had exempted customers from paying these charges at petrol pumps, resulting in banks bearing the burden.

Now, the banks want to levy the charges again and pass on the burden to fuel retailers as the Reserve Bank of India (RBI) circular on December 16, 2016, does not mention recovering these charges from customers.