Petrol Pumps to Protest After Jan 13, No Cards Will be Accepted

January 09, 2017 09:38
Petrol Pumps to Protest After Jan 13, No Cards Will be Accepted

Petrol pumps across the country have decided to do protest against the banks as they have announced to levy an extra charge on credit and debit card transactions. But after the government stepped in they have said that they will postpone the protest mostly until January 13.

The government, sources said, "has assured the dealers that the merchant discount rate or MDR fee won't be applied till January 13. The intervention came after the petroleum dealers' association had written to Union finance minister Arun Jaitley, informing him about the sudden decision by the banks to levy the transaction charge and their resolution to refuse card payments."

"Retail outlet owners and consumers should not take any heat of any kind of surcharge. The government is suggested to negotiate between oil marketing companies and bankers because it's a business preposition. The issue will be resolved very soon. Oil marketing company is giving some subsidy," said Petroleum Minister Dharmendra Pradhan.

As the government is planning to promote cashless transactions, the protest would have hit them as well as consumers because of the cash shortage.

"We want to help the government in the digital and cashless drive. Our margins are already less. We want them to compensate us," Ajay Bansal, chief of All-India Petroleum Dealers' Association, had said. He also had named three banks - HDFC, ICICI and Axis Banks -- among those which had levied the extra charge.

All the petrol pumps have been hit hard after demonetization as people are doing payment only through cards. In order to promote cash-less transactions, the government had suspended the Merchant Discount Rate (MDR) on fuel purchase after demonetisation. But after the deadline for submitting old notes ended, the banks have decided to levy MDR on petrol pump owners.

In their letter to Mr Jaitley, the All India Petroleum Dealers' Association said "since there has been no word of passing the charge to consumers, the dealers will sustain a loss. The pumps have been notified that 1% charge will be levied on all credit card transactions and between 0.25% and 1% on all debit card transactions from January 9, 2017. The banks have quoted a circular issued by the Reserve Bank on December 16 as the reason for the extra charges. Banks are using this as an excuse to improve their bottom line through transactions at fuel stations."

In a statement, ICICI Bank, however, said: "it wasn't among the banks that were going to charge transaction fees for card swipes from petrol pumps."

"We are not charging any transaction fee on the card payment from tomorrow," a company spokesperson said.

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