Indian Petrol Pumps Threaten UPI Block Over New ₹5 Fee

Petrol pump dealers across India have threatened to stop accepting UPI payments above ₹2,000 and revert to cash-only transactions if a new ₹5 Merchant Discount Rate (MDR) fee is imposed starting October 15. The All India Petroleum Dealers Association (AIPDA) has formally appealed to the Union Finance Minister for a complete exemption from the charge, arguing it would create a significant recurring financial burden on their fixed-margin business. The National Payments Corporation of India (NPCI) announced the revised digital payments framework, which introduces a flat, concessional MDR of ₹5 for fuel purchases via UPI exceeding ₹2,000. Transactions below this threshold will remain free. The NPCI has stated the fee is intended to protect petrol pump operators from potentially higher processing costs on large-value transactions. Dealer associations, including the Federation of All India Petroleum Traders (FAIPT) and the Akhila Karnataka Federation of Petroleum Traders (AKFPT), have echoed the AIPDA's concerns. They argue that dealer margins, set by state-run Oil Marketing Companies (OMCs) at approximately ₹2.40 to ₹3.