No proposal to scrap Rs 5 UPI fee on fuel payments above Rs 2,000, sources say
Finance Ministry sources say they have received no Petroleum Ministry proposal to remove the Rs 5 merchant fee on UPI fuel transactions above Rs 2,000. Fuel dealers are seeking relief, citing fixed margins and higher operating costs.
What happened
Finance Ministry sources said no proposal has been received to remove the Rs 5 MDR on UPI fuel payments above Rs 2,000. Petroleum dealers seek an exemption,
Key facts
- Rs 5 flat MDR for UPI fuel transactions above Rs 2,000
- Zero MDR for payments below Rs 2,000
- 0.4% MDR referenced
- Dealer margins largely unchanged since October 2017
Why this matters
Payments, fuel-tech, and dealer-network partners can position lower-cost acceptance solutions as fuel retailers seek ways to offset the unchanged UPI fee burden.
What to watch
- A formal Petroleum Ministry note or inter-ministerial consultation sent to the Finance Ministry.
- Public statements from dealer federations indicating planned protests, UPI restrictions or demands for higher commissions.
- NPCI, bank or acquiring-network changes to merchant discount pricing for fuel-category UPI transactions.
- Oil marketing company decisions on dealer commission revisions, digital-payment reimbursements or outlet operating-cost support.
- Reports of stations imposing payment-mode thresholds, refusing high-value UPI transactions or promoting split payments.
- Growth in average fuel-ticket size above Rs 2,000, especially in premium fuels, urban outlets and commercial-vehicle corridors.
- Fuel dealer associations are likely to seek meetings with the Petroleum Ministry, Finance Ministry, NPCI and oil marketing companies for a fee waiver or reimbursement.
- Large fuel retailers may quantify UPI-related costs by outlet and transaction size to support lobbying and negotiate acquiring-bank terms.
- Some dealers may informally steer high-value customers toward cards, cash, fleet cards or split UPI payments, creating inconsistent checkout experiences.
- Oil marketing companies may face pressure to raise dealer commissions or absorb digital-payment costs as an alternative to changing the UPI fee rule.
- Payments firms and banks may offer selective merchant pricing, settlement incentives or bundled services to retain fuel-station UPI volume.