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FinMin: Petrol Dealers' UPI MDR Issue is Between OMCs and Retailers, Not Government
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Moneycontrol•24-09-2026, 21:24
FinMin: Petrol Dealers' UPI MDR Issue is Between OMCs and Retailers, Not Government
- •Finance Ministry sources clarify that the concerns raised by petroleum dealers regarding UPI transaction charges are a commercial arrangement issue between Oil Marketing Companies (OMCs) and fuel retailers, not an MDR issue.
- •There is currently no proposal to scrap MDR on fuel purchases that has reached the Finance Ministry.
- •Under the revised UPI pricing framework, fuel transactions above Rs 2,000 will incur a flat Rs 5 MDR from October 15, while transactions below this threshold remain exempt.
- •Petroleum dealers, including the All India Petroleum Dealers Association (AIPDA), are opposing the new framework, arguing that the additional cost will impact their fixed margins and have sought a complete exemption.
- •Dealers highlight that their margins are fixed by OMCs, unlike other businesses, preventing them from absorbing additional payment processing costs, with some threatening to stop accepting UPI payments above Rs 2,000.
Key Questions Answered
Under the revised framework, fuel transactions above Rs 2,000 will attract a flat Rs 5 MDR, while transactions below this threshold will continue to carry zero MDR.
Dealers argue that fuel retailing operates on fixed commissions prescribed by oil marketing companies, leaving them with no flexibility to absorb additional payment processing costs or pass them to customers.
Finance ministry sources stated that the issue is not related to MDR but is a commercial matter between oil marketing companies and retailers, adding that commission-related issues are being discussed with the Petroleum Ministry.
