Oil Minister Dharmendra Pradhan today announced that MDR charges will not be levied upon customers on card payments at petrol pumps.
"MDR charges on card payments for fuel purchase will not be passed on to customers," Minister of State for Petroleum Dharmendra Pradhan said after a meeting with top officials.
"Petrol pumps will continue to accept card payments even after January 13," the minister said.
The government's decision comes after petrol pump owners threatened to stop accepting cards following bank's decision to resume MDR charge on petrol pump owners.
After demonetisation, Centre had waived off Merchant Discount Rate on fuel purchase for customers to promote cashless transactions
Meanwhile, oil companies and banks are discussing who is to bear MDR charges.
Petrol pump owners tonight deferred till January 13 their decision to not accept credit and debit card payments for fuel sales after banks put off the move to levy the transaction (MDR) charge. The late evening turnaround came after the government stepped in.
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 have decided to levy MDR on petrol pump owners.
This meant petrol pumps having to bear 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.
In protest of the move, petrol pump operators had decided not to accept card payments from January 9.
"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," said Ajay Bansal, President, All India Petroleum Dealers Association (AIPDA).
"This discount amount was supposed to be reimbursed to the dealers, but is not being executed properly," Pal said. He said dealers have been working on a low margin and demanded raising the dealers' commission to 5 percent from the existing rate of 3 percent taking petrol and diesel together.