Archive · 16 Sep 2026
Petrol Dealers Seek Exemption From UPI Charges Above ₹2,000
Petrol pump dealers are worried about a new UPI fee on large fuel payments.
The fee is ₹5 for a fuel purchase above ₹2,000.
Payments below ₹2,000 are still supposed to have no fee.
Dealers say even a small fee can become costly because pumps handle many payments.
They also say they cannot simply raise fuel prices to cover the cost.
This is because oil companies set fuel prices and dealer margins are prescribed.
Some dealer groups have asked for all fuel stations to be exempt from these charges.
One association warned that pumps might stop accepting large UPI payments if relief is not given.
NPCI says the ₹5 rate is concessional and is meant to prevent higher processing costs on large payments.
Petrol dealer associations are seeking a complete exemption from UPI merchant discount rates and flat fees at fuel stations.
The National Payments Corporation of India says a concessional ₹5 fee applies to fuel purchases above ₹2,000, while smaller payments remain charge-free.
Dealers say their regulated prices and fixed margins leave them unable to recover additional digital-payment costs.
The associations warned that they may stop accepting UPI payments of ₹2,000 and above if an exemption is not granted.
Dealers cited estimates of 23.9 million UPI fuel payments worth ₹1,573 crore nationwide, with roughly 20% above ₹2,000.
- Who
- Petrol dealers and associations, including the Federation of All India Petroleum Traders and other regional and national dealer groups; the National Payments Corporation of India set out the applicable UPI fee.
- What
- Dealers are seeking a complete exemption from UPI MDR and flat per-transaction fees for fuel payments, especially those above ₹2,000.
- When
- The articles do not specify when the charge was introduced or when the dealer letters were sent.
- Where
- The issue concerns petrol pumps across India, with dealer views reported from Delhi-NCR, Punjab, Uttar Pradesh, Mumbai, Karnataka and Rajasthan.
- Why
- Dealers say fuel prices and margins are regulated, so they cannot pass digital-payment costs to customers, while high transaction volumes could make even a ₹5 fee burdensome.
Petrol Dealers’ Position
NPCI’s Position
Whether the charge should apply
Petrol Dealers’ Position
Dealer associations want complete exemption from UPI MDR and flat fees, arguing that fuel stations have regulated prices, prescribed margins and many transactions.
NPCI’s Position
NPCI says a flat ₹5 concessional MDR applies to fuel purchases above ₹2,000.
Effect on operating costs
Petrol Dealers’ Position
Dealers say ₹5 per transaction could accumulate into a significant recurring burden, and a percentage-based MDR of up to 0.4% would be disproportionate to fuel-retailing economics.
NPCI’s Position
NPCI says the flat rate protects petrol pump operators from potentially higher processing costs on large-value fuel transactions.
Acceptance of large UPI payments
Petrol Dealers’ Position
The Federation of All India Petroleum Traders warned that dealers may stop accepting UPI payments of ₹2,000 and above if an exemption is not granted.
NPCI’s Position
NPCI states that payments below ₹2,000 remain charge-free, while its guidance retains the ₹5 rate for larger fuel payments.
- UPI fee above threshold
- NPCI says fuel purchases above ₹2,000 attract a flat concessional MDR of ₹5.
- UPI fee below threshold
- Fuel payments below ₹2,000 continue to have 0% MDR, according to NPCI.
- Dealers’ demand
- Complete exemption from MDR and flat per-transaction fees for petroleum retail outlets.
- Estimated transaction volume
- Dealers cited 23.9 million nationwide UPI fuel payments worth ₹1,573 crore.
- Estimated affected share
- About 20% of the cited transactions are above ₹2,000.
- Estimated dealer impact
- One dealer estimated a financial implication of ₹230–₹250 per day per petrol pump.
- Dealer margins
- Reported margins are about ₹2.40–₹3.40 per litre and are determined through oil marketing companies.
