Chandigarh, Oct 14 Petrol pump dealers and a trade body on Wednesday demanded complete exemption from all merchant discount rate (MDR) charges on petroleum products and retail dealers.
Senior leadership from Rashtriya Jan Udyog Vayapar Sangathan (RJUVS), Federation of All India Petroleum Traders (FAIPT), Petroleum Pump Dealers Association Punjab (PPDAP), and Petroleum Dealers Welfare Association Haryana (PDWA) raised serious concerns regarding “government digital transaction levies, severely inadequate dealer margins and the growing operational distress suffocating retail fuel outlets across Northern India.
Monty Sehgal, National Spokesperson of FAIPT, Paramjit Singh Doaba, President of PPDAP, Sanjeev Chaudhary, President of PDWA Haryana, and Gulshan Dang, Haryana State President of RJUVS jointly addressed the issue of recently introduced Merchant Discount Rate (MDR) charges on digital payments.
Sehgal said here that although the implementation of these charges has been temporarily deferred until Diwali, the intention remains to enforce them.
Notably, the decision to levy a Merchant Discount Rate of 0.4 per cent on transactions over Rs 2,000 has been deferred, with NPCI on Tuesday saying a new date for the implementation will be decided after Diwali.
For specific merchant categories and fuel, among others, a flat MDR of Rs 5 per transaction shall be applicable for transactions above Rs 2,000, Chaudhary said.
“Because petroleum dealers operate under strictly regulated, fixed margins, absorbing these transaction costs is impossible,” said Monty Sehgal.
“Consequently, we demanded a complete, one-hundred per cent exemption from all MDR charges on petroleum products and retail dealers,” Sehgal further said.
Sanjeev Chaudhary said that if the government does not resolve their issues, they will contemplate going on a nationwide strike after Diwali.
They highlighted that retail fuel operators across the country are facing an unprecedented financial crisis and heavy debt burden.
“Dealer margins, which were revised in 2017 and given only a nominal increase in late November 2024, remain entirely inadequate to meet fixed establishment costs. “Over eighty per cent of a dealer’s margin goes directly toward reimbursing fixed operational expenses, including staff salaries, electricity bills, rising bank interest on capital investments, and extensive compliance mandates enforced by Oil Marketing Companies (OMCs),” they said.
The minor margin increase in late 2024 failed to address these inflationary pressures, and low-volume dealers selling under 100 kilolitres per month received virtually no financial benefit, said Sanjeev Chaudhary.
Paramjit Singh Doaba said, “Following aggressive outlet expansions advertised in 2018 and 2023, the total number of petrol pumps nationwide has crossed one lakh, causing average monthly sales throughput per pump to plummet from 170 kilolitres down to 130 to 140 kilolitres.
“In Punjab and Haryana, the crisis is far more severe, with average sales dropping below 100 kilolitres per month, pushing numerous outlets to the brink of financial collapse.
To ensure the basic survival of retail outlets and maintain service quality for consumers, the associations appealed to the Central Government and OMCs to urgently revise dealer margins to 7 per cent of the billed value, giving special priority to small dealers selling 100 kilolitres each month.
The trade leaders also appealed to the state governments of Punjab and Haryana to take immediate action against “large-scale fuel smuggling through illegal bowser trucks occurring from Union Territory Chandigarh into border districts, driven by lower VAT rates in the capital”.
This tax differential is inflicting severe financial losses on border petrol pump operators while causing massive revenue leakage for both state exchequers. PPDAP and PDWA Haryana urged both state governments to consider equalising their oil VAT rates with Chandigarh to eliminate illegal fuel trade, protect dealer livelihoods, and safeguard state revenues, they said.
(PTI News)
