No additional charges on digital transactions, assures Pradhan

Officials promise to sort out the mayhem by Friday

Petroleum minister Dharmendra Pradhan today assured that neither the customers nor dealers will bear additional charges on digital transactions at fuel outlets. However, there is more drama in store on the issue as the decision by banks to levy 1% charge for every sale on credit and debit cards may be reviewed by Friday.

Interestingly, dealers claim that there is an outstanding due of more than Rs 10 crore that the banks have to reimburse on the 0.75% discount that the government had announced on December 13 on purchase of fuel through card. The Monday’s development comes after a Sunday midnight flip-flop by two petroleum dealers associations on its decision of not accepting any card transactions in 30,000 fuel retail outlets across the country. “We have been informed that the transaction charges have been deferred till January 13. Will take a call on our future course after that,” said Ajay Bansal, president of the All India Petroleum Dealers Association. When contacted, an IOC official said that talks are going on between all the stakeholders including finance ministry, petroleum ministry, oil marketing companies, banks and the dealers and all the issues will be sorted out by Friday.  According to sources close to the development, Pradhan is likely to meet all the stakeholders on Tuesday. 

Meanwhile, Pradhan said in a statement that the Government had issued guidelines in February 2016 stating that the Merchant Discount Rate (MDR) charge will not be passed on to the consumers and that the stakeholders will take appropriate steps to absorb the MDR charges. “There will be no additional levy on digital transaction at petrol stations even after 13 January, 2017,” he said. He added that the petrol pump transaction fee is a business model between the banks and oil marketing companies, which they will resolve.

However, the dealers are not taking the assurance that the losses will be reimbursed on face value. “The government had announced 0.75% discount last month. We were told that it will be paid back to our accounts by the banks. But till now, dealers across the country are yet to receive more than Rs 10 crore on re-imbursements only,” said A D Sathyanarayan, President of Consortium of India Petroleum Dealers (CIPD). This amount was supposed to be back on the accounts of customers and dealers within three working days, while some dealers claim that it is yet to be back.  

According to the associations, the subsidy that the government is giving on cashless transactions is apparently being suffered by the dealers, neither banks and nor oil marketing companies. Out of the total 56,190 fuel retail outlets in the country public sector majors like Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd has a combined network of 52,604 retail outlets. Out of these, only 30,000 outlets have point of sale machines.

Four banks, including HDFC Bank, Axis Bank, ICICI Bank and Punjab National Bank had informed dealers that they will be charged 1% on all credit card transactions and between 0.25% and 1% on all debit card transactions from 9th January 2017. This has lead to protest from the associations as it would have wiped out 30% of the gross dealer margin on petrol and 40% of the gross dealer margin on diesel. “Our gross margin on petrol and diesel comes to around Rs 2.3 per litre. If they are imposing charges on that, how will we sustain?,” said another industry official, who does not want to be named. The share of e-payments through petrol pumps has increased to 44%, compared to a previous average share of 20% before the demonetisation announcement.