19 September,2026 03:10 PM IST | Mumbai | mid-day online correspondent
The Petrol Dealers Association, Mumbai, has written to the Reserve Bank of India (RBI), seeking a complete exemption for fuel retailers from the proposed charges. Representational Pic
Mumbai petrol dealers have warned that they may discontinue UPI payments at fuel stations across the city from October 15 if proposed Merchant Discount Rate (MDR) charges are imposed on UPI transactions above Rs 2,000.
The Petrol Dealers Association, Mumbai, has written to the Reserve Bank of India (RBI), seeking a complete exemption for fuel retailers from the proposed charges.
In a letter dated September 16 and addressed to the RBI Governor and the Chief General Manager of its Department of Payment and Settlement Systems, Association president Chetan Modi said the proposed charges could put financial pressure on fuel retailers.
The letter was received and stamped by the RBI's Central Office in Fort, Mumbai, on the same day.
The association said Mumbai's petrol dealers had embraced digital payments and that more than 60 per cent of fuel and diesel transactions at outlets are now digital.
However, it said the proposed MDR charges on UPI transactions above Rs 2,000 from October 15 could create financial difficulties for fuel retailers.
According to the association, dealers have been operating with largely unchanged margins since 2017 while facing rising real estate costs, compliance expenses and labour costs in Mumbai.
The association also argued that fuel retailers cannot pass transaction charges on to customers because fuel prices are regulated and dealers are not permitted to levy additional charges.
It said this would leave dealers to absorb the cost of UPI transactions, particularly as many fuel purchases exceed Rs 2,000.
The association said the dealer community had expanded digital payments based on the existing zero-MDR system and argued that introducing transaction charges would further squeeze already limited margins.
The Petrol Dealers Association has urged the RBI to exempt petrol pumps from any UPI MDR charges.
The association warned that if the charges are not waived, it may be forced to take a collective decision to discontinue UPI payments at petrol pumps across Mumbai from October 15.
The dealers have sought immediate intervention from the RBI, saying a withdrawal of UPI payments could cause inconvenience to motorists and disrupt digital payment facilities at fuel stations across the city.
