Punjab fuel dealers seek exemption from new Rs 5 UPI fee

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Dealers urge Centre to keep fuel outlets outside new MDR framework for payments above ₹2,000; dealers cite thin margins

Chandigarh, September 22

Petrol pump dealers across Punjab have been saying they would stop accepting UPI payments above Rs 2,000, opposing the new merchant discount rate (MDR) framework and seeking exemption for fuel outlets.

According to the Union Ministry of Finance’s Department of Financial Services, the finalised MDR framework will take effect from October 15, 2026. Under the framework, fuel purchases made through UPI above Rs 2,000 will attract a flat MDR of Rs 5 per transaction, while payments below Rs 2,000 will continue to have zero MDR.

According to media reports, dealers were already operating on very thin margins and could not bear an additional charge on the UPI transactions. He said the association supported the decision to stop accepting payments above Rs 2,000 and urged the government to exempt petrol pumps from such charges.

The Petrol Pump Dealers’ Association Punjab (PPDAP) urged the Union Ministry of Petroleum and Natural Gas, Ministry of Finance and oil marketing companies to exempt petroleum retail outlets from the MDR on the UPI transactions above Rs 2,000.

In a letter to Union Ministers and the chairpersons and managing directors of Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd, PPDAP president Paramjit Singh Doaba said petroleum dealers could not absorb the additional charges.

The association referred to an extraordinary gazette notification from the Union Ministry of Finance dated September 14 and sought protection for petroleum retail outlets under the new UPI transaction framework.

The PPDAP said dealers were already struggling to meet operational expenses because of inadequate margins. It urged the Centre to issue an order or advisory specifically, excluding petrol pumps from the MDR on the UPI transactions.

The dealers said if the exemption were not granted, they would have no option but to stop accepting UPI payments above Rs 2,000.

Meanwhile, the Department of Financial Services has also clarified that the MDR is a merchant-side charge and cannot be passed on to customers.