A member of petrol pump owners' association said that they had been "informed by HDFC Bank that we will be charged 1 per cent on all credit card transactions and between 0.25 per cent and 1 per cent on all debit card transactions from January 9, 2017".
Earlier, the All India Petrol Pump Association had announced they would not accept payments through debit and credit cards to protest the decision by banks to impose 1 per cent levy on every sale from Sunday midnight.
They told the newspaper that they've asked banks to hold off on imposing the extra charge until petrol pump dealers, "state-run fuel retainers, banks and petrol pump owners" have had a chance to discuss the implications of the move.
Denial of card payments for fuel would have caused major inconvenience to consumers in times of cash shortage and dealt a setback to the government's push for cashless payments.
According to reports, ICICI Bank and HDFC Bank account for some 60% of card swipe machines deployed at 52,000 petrol pumps out of the 53,842 public sector fuel retail outlets.
This announcement will certainly get many anxious as the country has been going through a cash crunch recently and disallowing the usage of credit or debit cards at petrol pumps will only worsen the situation. President of the All India Petroleum Dealers Association, Ajay Bansal, said that while they supported the Centre's drive to transition into a cashless economy, it should not be at their cost. "This will lead to financial losses for the dealers", he had said, adding that credit card machine issuers are also delaying settlement of dues.
Bansal said that hey could not bear the additional charges levied by the banks.
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"The same will be debited to petroleum dealers' account and net transaction value will be credited to our account".
Also, there seem to be disputes about purchases being returned or not delivered. He said petrol pump margins are fixed on a per kilolitre basis and do not have any scope to absorb these charges.
The total margin of the petroleum dealers is around 2.5 per cent.
Following the announcement to stop accepting cards at bunks, union government made an intervention to clarify that MDR fee won't be applied till 13th of this month.
"The petroleum ministry conveyed to us that the banks have deferred their decision to charge on cards till Friday".
The oil companies, he said, provide them a margin of 3.6 per cent per litre.