Petrol pump dealers in Madhya Pradesh and Punjab have decided not to accept UPI payments above ₹2,000 from October 16, citing the proposed 0.4% Merchant Discount Rate (MDR) on such transactions.

According to the dealers, petrol pumps operate on very low profit margins, making it difficult to absorb the additional MDR cost. They have urged the government to exempt UPI transactions from MDR charges in the same manner as certain debit and credit card transactions.

Ajay Singh, president of the Madhya Pradesh Petroleum Dealers Association, said the decision was taken following the announcement of the proposed MDR arrangement. According to him, an average petrol pump handles around 100 UPI transactions above ₹2,000 every day.

The dealers’ association estimates that the proposed 0.4% MDR would result in an additional cost of around ₹590 per day and nearly ₹17,700 per month for each petrol pump. Singh said dealers operate on a margin of around 0.5%, making it difficult for them to bear the additional expense.

However, customers will continue to have the option of paying through debit or credit cards, with no payment limit imposed on card transactions, the dealers said.

Dealers Seek MDR Exemption for UPI

Petrol pump dealers have pointed out that they receive relief from MDR charges on certain debit and credit card transactions. They are seeking similar exemption for UPI payments, arguing that the additional transaction cost would put further pressure on their already low margins.

Punjab Dealers Also Announce Similar Move

Petrol pump dealers in Punjab have also decided to stop accepting UPI payments above ₹2,000 from October 16.

Paramjit Singh Doaba, president of the Punjab Petroleum Dealers Association, said dealers cannot afford the proposed UPI transaction charges due to low margins and rising operational costs.

He added that debit and credit card payment options will continue to remain available for customers.

Doaba has reportedly written to the concerned ministry as well as Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) regarding the issue.

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