Archive · 17 Sep 2026
Mumbai Petrol Pumps Threaten UPI Shutdown Over Revised MDR
Petrol pump owners in Mumbai are unhappy about a new UPI fee.
The fee would be 0.4% for some UPI payments above Rs 2,000.
The owners say fuel stations earn limited margins and cannot easily add this cost to fuel prices.
They have asked the government and the Reserve Bank of India for an exemption.
If they do not receive one, they may stop accepting UPI payments on October 15.
This could make it harder for people who do not carry cash.
Transport representatives also worry that the extra cost could affect their businesses and customers.
The dealers say they have already spent money building digital payment systems.
The government’s response to their request was still awaited in the article.
Mumbai petrol dealers may stop accepting UPI payments from October 15 if fuel retailers are not exempted from revised MDR charges.
The revised regime applies a uniform 0.4% charge to person-to-merchant UPI transactions above Rs 2,000, with exceptions for small and micro merchants.
The Petrol Dealers Association of Mumbai has asked the Reserve Bank of India and Ministry of Finance for a complete waiver.
Dealers say regulated fuel prices, unchanged commissions and rising operating costs make absorbing the charge difficult.
Motorists and transport representatives warn that ending UPI payments could cause inconvenience, raise costs and weaken digital-payment adoption.
- Who
- The Petrol Dealers Association of Mumbai, the Reserve Bank of India, the Ministry of Finance, motorists and transport representatives are involved.
- What
- Mumbai petrol dealers have threatened to stop accepting UPI payments over a revised 0.4% MDR charge on eligible transactions above Rs 2,000.
- When
- The threatened payment stoppage would begin on October 15, 2026; the report is dated September 17, 2026.
- Where
- Petrol pumps in Mumbai.
- Why
- Dealers say the charge would further reduce their margins because fuel prices are regulated, commissions have largely remained unchanged and operating costs have risen.
Petrol Dealers' Cost Concerns
Motorists' and Transporters' Payment Concerns
Effect of the MDR charge
Petrol Dealers' Cost Concerns
Dealers say the 0.4% charge would create an existential challenge by squeezing already limited margins amid regulated fuel prices and rising costs.
Motorists' and Transporters' Payment Concerns
Motorists and transport representatives say withdrawing UPI would create inconvenience and that extra transaction costs could ultimately affect transporters and consumers.
Digital payments
Petrol Dealers' Cost Concerns
Dealers say they invested heavily in digital payment infrastructure under an expected zero-MDR environment and are seeking an exemption.
Motorists' and Transporters' Payment Concerns
Transport representatives warn that a surcharge or return to cash could undermine digital-payment gains and the Digital India objective.
- Proposed MDR
- A uniform 0.4% charge on person-to-merchant UPI transactions above Rs 2,000.
- Threatened deadline
- Mumbai petrol dealers may stop accepting UPI payments from October 15, 2026.
- Dealers' demand
- A complete MDR waiver for petrol pumps.
- Government bodies contacted
- The Reserve Bank of India and the Ministry of Finance.
- Digitalization level
- The association said more than 60% of fuel and diesel sales transactions at its outlets are digital.
- Merchant survey
- A LocalCircles survey cited in the article found that 17% of surveyed merchants were willing to bear the charge, while more than 41% opposed doing so.