Oil ministry officials meet petroleum dealers body on MDR exemption demand

Petroleum dealers have sought exemption from MDR on UPI fuel purchases above Rs 2,000, warning that the additional transaction cost could put pressure on prescribed dealer margins

Senior officials from the Ministry of Petroleum and Natural Gas (MoPNG) on Thursday held meetings with the All India Petroleum Dealers Association (AIPDA) to discuss the dealers’ demand for exemption from merchant discount rate (MDR) on UPI transactions.

The dealers’ body said in a statement that it conveyed concerns to senior officials of the oil ministry during the discussions. They argued that the additional cost could put pressure on their margins as fuel retailing operates on prescribed dealer commissions.

The meeting comes amid concerns raised by petroleum dealers over the proposed imposition of MDR of ₹5 per transaction on petrol and diesel purchase of above ₹ 2,000. Such transactions account for around 30-40 per cent of total purchases across retail outlets in the country, said a person aware of the matter.

During the meeting, the oil ministry officials explained the rationale behind introducing MDR and how the mechanism could support the development of the next layer of India’s UPI digital infrastructure. “Petroleum dealers have been at the forefront of adopting digital payments and have worked closely with the government to promote their use across the country,” AIPDA said.

The association said its concerns were addressed during the discussions and it expects the dialogue with the government to continue. “We look forward to continuing the dialogue towards a mutually beneficial solution for consumers, petroleum dealers, and all stakeholders in India’s UPI ecosystem,” the body said.