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Banks levying charges for card use at petrol pumps

Prashant Mukherjee/SNS | New Delhi |

Despite assurances from Union Petroleum Minister Dharmendra Pradhan that no fuel surcharge will be imposed on purchase of petrol and diesel through credit and debit cards, customers are being levied a charge of up to 2.5 per cent for filling fuel at retail outlets. Most banks started imposing charges on petrol pump outlets even before 1 April.

On 9 January, Pradhan said “MDR (merchant discount rates) on card payments for fuel purchase will not be passed on to customers. Oil companies and banks are currently in discussions to determine who will bear MDR charges.”

To promote cashless transactions post demonetisation, the Central government had waived the MDR on fuel purchases for consumers. All India Petroleum Dealers Association President Ajay Bansal told The Statesman, “We have clear cut instructions that consumers should not be charged for filling fuel through cards. If banks are charging customers then it is absolutely wrong and action should be taken by the Ministry of Finance and Ministry of Petroleum.” He added that if this continues it will hurt the government's digital payment initiative.

In order to check the veracity of the initial reports, this reporter filled petrol worth Rs 500 from Navyug Service Station petrol pump outlet of BPCL in New Delhi and was charged a surcharge of Rs 14.37. However, he also received a discount of Rs 3.75 as part of the government initiative. The Centre announced a discount of 0.75 per cent on fuel purchases made using digital payment.

Since petrol pumps claim that their margins are so thin that they can’t pay for the transaction, the petroleum ministry earlier decided that the charges will be borne between the oil marketing companies and the banks. However, since this arrangement did not work out and OMCs refused to bear the charges, the banks have started imposing these charges on the consumers.