Stories
Petrol Bunks Nationwide May Shut Down After Diwali Over Digital Payment Fees
- •Petrol pump dealers and trade associations have warned of a nationwide strike after Diwali if their demands regarding digital payment fees are not met.
- •Dealers are protesting against the MDR fee on digital transactions, demanding a 100 percent exemption on petroleum products.
- •Associations report that dealer commissions have not been adequately revised since 2017, making it difficult to cover operational costs like salaries and electricity.
- •Average monthly sales per pump have dropped significantly across the country, putting many small distributors on the verge of financial collapse.
- •Dealers have also urged state governments to align VAT rates with Chandigarh to curb the illegal transport of fuel from affecting border region pumps.
Key Questions Answered
Petrol pump dealers and trade associations are warning of a nationwide strike after Diwali due to the financial strain caused by proposed digital transaction fees, specifically the Merchant Discount Rate (MDR) on transactions exceeding 2,000 rupees. Dealers argue that with their fixed profit margins and rising operational costs, they cannot absorb these extra fees.
Under the framework, fuel transactions exceeding 2,000 rupees are set to face a flat Merchant Discount Rate (MDR) fee of 5 rupees, alongside a deferred 0.4 percent MDR charge. Although the implementation of these charges has been temporarily postponed until after Diwali, dealer associations are demanding a complete 100 percent exemption.
Trade associations have urged the central government and oil marketing companies to increase dealer commission margins to 7 percent of the bill value, prioritizing small dealers. Additionally, they have called on state governments to align fuel VAT rates with Chandigarh to curb illegal fuel transport from border areas.
