Archive · 19 Sep 2026
Fuel Pumps Threaten UPI Restrictions Over Proposed MDR Fees
Petrol pump owners in Mumbai and Madhya Pradesh are worried about a new fee on some UPI payments.
UPI is a way people pay using their phones.
The proposed fee would apply to certain payments above Rs 2,000.
The dealers say fuel stations already have small profits and cannot easily pay another charge.
They also say fuel prices are regulated, so they cannot simply add the fee to customers’ bills.
Mumbai dealers warned they could stop accepting these payments from October 15.
Madhya Pradesh dealers said they could impose the limit from October 16.
A traders’ group says this could make digital payments less convenient and slow their use.
The dealers are asking the government to exempt fuel payments from the fee.
Petrol pump associations in Mumbai and Madhya Pradesh may stop accepting UPI payments above Rs 2,000.
Mumbai dealers cited October 15, while Madhya Pradesh dealers announced October 16 as the proposed start date.
The dealers are seeking a complete exemption from the proposed MDR on fuel-related UPI payments.
The proposed general MDR is 0.4% on eligible merchant transactions above Rs 2,000; a flat Rs 5 fuel charge was also reported.
The Confederation of All India Traders warned the move could inconvenience motorists and discourage digital payments.
- Who
- Petrol dealers’ associations in Mumbai and Madhya Pradesh, the All India Petroleum Dealers Association, and the Confederation of All India Traders.
- What
- Fuel dealers have threatened to stop accepting UPI payments above Rs 2,000 unless petrol pumps are exempted from the proposed MDR.
- When
- Mumbai dealers cited October 15; Madhya Pradesh dealers announced October 16. The year was not specified.
- Where
- Petrol pumps in Mumbai, Madhya Pradesh, and potentially other parts of India.
- Why
- Dealers say the proposed charges would add to their costs while their commissions and profit margins remain limited.
Fuel Dealers and Traders
Motorists and Digital-Payment Users
Who should bear the MDR?
Fuel Dealers and Traders
Dealers want a complete waiver for fuel retailers, saying regulated fuel prices, unchanged commissions, and limited margins make the added cost difficult to absorb.
Motorists and Digital-Payment Users
Motorists rely on UPI for fuel purchases, and any restriction could make larger digital payments less convenient, especially for people without enough cash.
Effect on digital payments
Fuel Dealers and Traders
The Confederation of All India Traders says imposing charges after years of promoting UPI could discourage merchants from continuing to use digital payments.
Motorists and Digital-Payment Users
Observers cited in the reports say stopping higher-value UPI payments could inconvenience thousands of motorists who have shifted to digital payments.
Scope of the proposed action
Fuel Dealers and Traders
Mumbai and Madhya Pradesh dealer groups have threatened restrictions unless the MDR is withdrawn or fuel payments are exempted; the All India Petroleum Dealers Association has also sought an exemption.
Motorists and Digital-Payment Users
The reports describe the restrictions as a potential disruption for customers, but do not report a formal response from the government supporting or opposing the dealers’ threat.
- Payment threshold
- Above Rs 2,000
- Proposed general MDR
- 0.4% on eligible person-to-merchant UPI transactions above Rs 2,000
- Reported fuel transaction charge
- Flat Rs 5 on fuel transactions above Rs 2,000
- Mumbai proposed start date
- October 15
- Madhya Pradesh proposed start date
- October 16
- Potentially affected Madhya Pradesh stations
- Around 4,700
- Mumbai digital-payment share
- More than 60% of fuel and diesel sales at association outlets
