In appeal to Centre, Maharashtra petrol dealers seek UPI MDR exemption

Petrol dealers in Maharashtra have called upon the central government for a complete waiver of the Merchant Discount Rate (MDR) and other digital payment fees associated with fuel transactions. These fees could directly impact their already regulated profit margins. FAMPEDA, the Federation of All Maharashtra Petrol Dealers Associations, has written to the Union Finance Ministry, the Ministry of Petroleum and Natural Gas, the Reserve Bank of India, NPCI, and the marketing directors of major fuel companies, demanding urgent action.

The main issue concerns a proposed 0.4% charge on UPI transactions exceeding Rs 2,000, which many fuel purchases exceed. FAMPEDA argues that any such charges would be absorbed by the already thin profit margins, rather than being passed onto customers. The dealers have not objected to digital payments themselves, stating that they have actively facilitated UPI, QR-code payments, card swipe machines, and fleet cards.

However, they are concerned about the financial burden of MDR, the potential delays and hidden fees from fintech partners, and the freezing of bank accounts due to cyber-fraud complaints. FAMPEDA is seeking a review and grievance-redressal mechanism to release frozen funds faster. They are also requesting that fuel outlets be recognized as a special category of merchants due to their regulated pricing and fixed margins.

The association is willing to provide transaction data and participate in discussions with the relevant authorities. A national meeting of petrol dealers will be held on September 27 to discuss the issue in detail.