1% transaction fee on card payments at petrol pumps: Consumers will not have to pay any surcharge, says Oil Minister Pradhan

Union Finance Minister Arun Jaitley on Monday said that the government was aware of the row over 1% petrol pump transaction fees on card payments proposed by the banks.

"We're discussing the issue. I have asked the secretary of the Department of Economic Affair to discuss the matter with banks. Petroleum Minister Dharmendra Pradhan is also in touch with banks," Jaitley said on the question on the recent tussle between the banks and the petrol pump associations over the new 1 per cent transaction fee proposal. 

Jaitley said this while briefing the media on Direct and Indirect tax figures in New Delhi on Monday. 

Also addressing the issue, Petroleum Minister Dharmendra Pradhan has assured that the discussion between the petrol pump association and banks over cashless transaction charges does not affect consumers. 

They can continue to pay for their petroleum products through debit card, credit card as usual, Pradhan said on Monday. 

The minister also clarified that the discussion focuses on sharing of MDR charges between petrol pumps and banks, none of the charges will be translated to consumers. 

Pradhan also hinted that consumers will be able to use cashless transaction methods for payment for petrol and diesel seamlessly after the given deadline of January 13 as well. 

Earlier, various associations and petrol pump dealers had decided not to accept credit card and debit card payment from January 8 mid-night owing to banks levying 1 per cent of transaction charge.

Petrol pumps had been protesting against various banks' move of levying 1 per cent transaction charge on the use of credit and debit card, after banks decided to put transaction (MDR) charge on them instead of consumers. 

After bank's notice, All India Petroleum Dealers Association in a meeting concluded that it will not be feasible for the petrol pumps owners to bear the extra cost owing to less margin in the business.

Later on January 8 night, the banks deferred their decision to charge 1% transaction fee on card payments at petrol pumps from January 9.
Following the decision by bankers, petroleum dealers also put off till January 13 their decision to stop accepting cards.

The decision by the banks to defer the fee came after prodding from the Petroleum Minister Dharmendra Pradhan during discussions among bankers, dealers and representatives of state-run fuel retailers.

Also read | Petrol pumps defer decision of not accepting credit, debit cards for fuel purchase till January 13