Petrol pump
In picture: A petrol pump in Bengaluru.IANS File Photo

The common man will not need to pay transaction charges at petrol pumps when using credit or debit cards for payment, the government said on Monday. Minister of State (Independent Charge) Petroleum & Natural Gas Dharmendra Pradhan said the current arrangement, where the customer pays no such charge, will continue as per the February 2016 order. 

He told reporters on Monday: "Neither the customers nor petrol pumps will bear additional charges on digital transactions." He added: "As for the petrol pump transaction fee, it is a business model between banks and oil-marketing companies, which they will resolve."

It may be noted that petrol pumps across the country had late on Sunday night said they had deferred their decision to stop accepting credit and debit cards because of the extra charge banks were levying on them for transactions.The move came after banks put a stop on these charges in another late-night development.

According to a PTI report: "To promote cash-less transactions, the government had waived the Merchant Discount Rate (MDR) on fuel purchase post demonetisation for consumers. But after the expiry of the 50-day window, the banks decided to levy MDR on petrol-pump owners."

This had not sat well with a lot of people, including the pump-owners themselves. And their primary target was HDFC Bank, which was charging 1 percent MDR. Mumbai Petrol Dealers Association president Ravi Shinde told ANI on Saturday: "Most of the petrol pumps are using HDFC POS machines."

Later in the day, All-India Petroleum Dealers Association president Ajay Bansal said petrol-pump owners had received notification from HDFC, Axis Bank and ICICI Bank, stating that the banks had informed them that the 1 percent MDR would be charged to the pump owners themselves. "There is not enough scope in our earning to bear this cost," he added.

However, facing widespread backlash, the banks put off the implementation of their decision for some time. Bansal was later quoted by PTI as saying: "We have received official communication from oil marketing companies that the transaction fee charges have been deferred till January 13, 2017. AIPDA also has decided to defer the agitation till January 13."