Tamil Nadu petrol pumps to stop accepting cards from Monday

The decision was taken against service charges being levied on card transactions

The petroleum dealers in Tamil Nadu has announced that they will stop accepting credit cards and debit cards for sale of fuel from the petrol pumps from Monday. This decision came as a protest against 1 per cent levy plus taxes on all such transactions made.

"Various ministries and oil marketing companies have coerced all dealers to accept credit and debit card payments. We have suddenly received intimatioin from the bankers, reneging on their existing agreements with us and for having decided levy a Merchant discount rate of 1% + taxes on all transactions done at our retail outlets from January 9, 2017. This has been done unilaterally by the bankers who have installed card machines at our premises," said K P Murali, President, Tamil Nadu Petroleum Dealers Association, affiliated to Consortium of Indian Petroleum Dealers.

"The margins, fixed on a per litre basis do not have scope to absorb these charges and the specific mechanisms for these products to compute the margin do not have any scope for credit/debit card MDR which may lead to financial losses for the dealers", added Murali.

M Haider Ali, General Secretary, Tamil Nadu Petroleum Dealers Association said that the petrol pumps are currently getting a margin of around 1.5 per cent which includes all expenses and a levy of 1 per cent plus taxes would leave very little as margin to the dealers. For instance, for 1 litre of diesel today's retail price is Rs 60.27 and the margin for petrol pumps are around Rs 1.40, of which 90 per cent are expenses.

"While MDR has been imposed in other retail formats, the petrol pumps were exempted from it so far, considering the low margins they enjoy", Haider Ali said.

"The bankers are delaying settlements and not settling the entire dues as per our settlements. The reconciliation of swipes to amount being credited to our accounts is causing a lot of hardships and losses to a large percentage of the dealer community," Murali further said.

"The transaction through cash at the outlets has gone up from five per cent of the business earlier to around 50-70 per cent post demonetisation. Unlike cash transactions, the petrol pumps have to wait for at least four days to get the money into their account in the case of card transactions", added Ali.

The association has requested various authorities and oil marketing companies to intervene and rectify the situation.