Petrol Dealers Threaten UPI Curbs Over Proposed MDR on Fuel Payments

Petrol pump dealers across several states, including Madhya Pradesh, have warned that they may stop accepting UPI payments above Rs 2,000 from October 15 unless fuel retailers are granted a full exemption from the proposed merchant discount rate (MDR) on such transactions.

The dealers are opposing the proposed 0.4% MDR on UPI payments made at petrol pumps. They have argued that rising operating costs, combined with fuel commissions that have remained unchanged, leave them with little room to absorb any additional transaction charges.

The All India Petroleum Dealers Association has backed the demand for a complete waiver of MDR on UPI payments at fuel outlets. In Madhya Pradesh, petroleum dealers have separately called for the withdrawal of the proposed levy and for fuel sales to be kept out of the MDR framework.

The prospect of a Rs 2,000 cap on UPI payments at petrol pumps has also drawn concern from the Confederation of All India Traders (CAIT), which described the proposed step as a serious concern for both consumers and retailers.

If the restriction is implemented, customers who rely on UPI for larger fuel purchases could face difficulties, particularly at outlets that adopt the limit. The standoff comes ahead of the October 15 deadline, with dealers yet to receive any indication of relief on the proposed charge.