Petrol pump dealers in Punjab oppose new MDR on high-value UPI fuel payments, citing thin profit margins and rising operating costs
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Chandigarh, September 21, 2026: Petrol pump dealers across Punjab have announced that they will stop accepting UPI payments above ₹2,000 from October 16, protesting the proposed Merchant Discount Rate (MDR) on high-value digital transactions.
The decision has been taken by the Petrol Pump Dealers Association Punjab, which has raised concerns over the additional financial burden the new MDR framework could place on fuel retailers.
According to the association, petrol pump dealers operate on relatively low margins and already have significant expenses related to electricity, staff salaries and maintenance. Association president Parmjit Singh Doaba said that around 30 to 40 per cent of consumers make UPI payments above ₹2,000 at petrol stations on a daily basis.
Dealers have argued that absorbing the additional digital payment cost could put further pressure on their margins.
Dealers seek exemption from MDR
The association has urged the Union Petroleum Ministry and oil marketing companies to intervene and exempt petrol pump dealers from the MDR applicable to UPI fuel payments above ₹2,000.
The issue follows the new UPI MDR framework under which fuel transactions above ₹2,000 are subject to a flat ₹5 MDR on the merchant side from October 15. Customers are not supposed to pay this MDR separately.
However, petrol pump dealers have opposed the charge and have indicated that restricting UPI payments above the threshold is a way of protesting against the additional cost.
What does this mean for customers?
If the decision is implemented as announced, customers visiting participating petrol pumps in Punjab may not be able to use UPI for fuel purchases above ₹2,000 from October 16.
UPI payments of ₹2,000 or less are not affected by the proposed MDR applicable to higher-value fuel transactions. The new merchant-side charge is intended to be borne by the petrol pump operator rather than directly charged to the customer.
The Punjab dealers’ decision could therefore lead customers making larger fuel purchases to use cash or other available payment methods if individual petrol pumps stop accepting higher-value UPI payments.
Association asks Centre and oil companies to act
Petrol pump dealers have appealed to the Union government and oil marketing companies to review the MDR arrangement and provide an exemption for fuel retailers.
The association has maintained that the combination of low fuel margins and operating expenses makes it difficult for dealers to absorb additional payment-processing costs.
The issue is likely to remain under discussion between fuel retailers, oil companies and the government ahead of the October 16 deadline.
Source: Babushahi Network / Babushahi.com; supporting report by The Tribune.
