Dharmendra Pradhan clarifies: No additional charges for card payments at fuel stations

New Delhi: Clarifying on the issue of charges for transactions through cards at petrol pumps, Petroleum Minister Dharmendra Pradhan said on Monday that there will be no additional charges on digital transactions made at petrol stations.

Petroleum Minister Dharmendra Pradhan. Image courtesy PIB

Petroleum Minister Dharmendra Pradhan. Image courtesy PIB

"Neither the customers nor petrol pumps will bear additional charges on digital transactions. The issue will be resolved," Pradhan said here outside Parliament.

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

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

Banks and oil companies are in discussions as to who should bear these charges, it said a day after averting a crisis that would have hit millions of people as oil pump owners threatened to stop taking card payments.

"Merchant Discount Rate (MDR) charges will be levied as per RBI guidelines but who will take the hit? Banks, oil marketing companies are discussing," Pradhan told reporters after meeting Finance Minister Arun Jaitley on the issue.

"We had assured yesterday also that since retail outlets, petrol pump owners work as commission agents, we will not pass on the cost to them," he said.

Petrol pump operators had yesterday threatened to stop accepting card payments after banks said the transaction charges of up to 1 percent will have to be borne by them.

The crisis was averted after banks agreed not to insist on transaction charges for five more days, leading to pumps owners deferring their plans till January 13.

Pradhan said the government stands by its decision that customers using non-cash digital modes of payments will not have to pay any transaction charge. Also, the 0.75 percent discount on fuel rate for using digital payments will continue.

"Banks and oil marketing companies (OMCs) are discussing the issue. In the coming days a mechanism will be worked out under which customers or petrol pump owners will not bear the cost," he said.

Pradhan said the government had in February last year issued a circular saying customers will not have to bear the MDR charges on digital transactions so as to help the country move towards digital transaction and less cash economy.

"Government will ensure implementation of that decision," he said. "In the coming days whatever digital transactions happens especially in petrol pumps, the burden will not be passed on to customers."

When a card payment is made using a POS machine, service charges are levied. All stakeholders are discussing who will bear these, he said.

Agencies