No more discounts on credit card payments at petrol vends
Credit card payments to buy fuel at petrol pumps will from October 1 not get a 0.75 per cent discount that state-owned oil companies had introduced...
New Delhi : Credit card payments to buy fuel at petrol pumps will from October 1 not get a 0.75 per cent discount that state-owned oil companies had introduced more than two-and-a-half years back to promote digital payments.
"Dear SBI credit cardholder, as advised by public sector oil marketing companies, the 0.75 per cent cashback on fuel transactions will be discontinued with effect from October 1, 2019," the country's largest bank in a text message informed its credit card customers.
The government had asked Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) to give a 0.75 per cent discount on card payments for fuel purchases after a widespread cash crunch in late 20016 following demonetisation of 86 per cent of currency notes in circulation.
The 0.75 per cent discount of the value of fuel purchases using credit/debit cards and e-wallets was introduced in December 2016 and had continued for more than two-and-a-half years, straining OMCs. Apart from the cash discounts, the government had also directed OMCs to bear the burden of card payment charges called merchant discount rate (MDR), which is usually paid by the retailer.
An industry official said the oil companies have decided to discontinue the discount on all credit card payments from October 1. However, the discount on debit card and other digital modes of payments would continue, he said.
The three fuel retailers paid Rs 1,165 crore in e-payment discounts and Rs 266 crore to banks for bearing MDR, totalling Rs 1,431 crore in 2017-18. In 2018-19, the outgo almost touched Rs 2,000 crore. This after the number of digital transactions jumped from 10 per cent in 2016 to over 25 per cent in 2018.
To stem their cash outgo, the oil companies in August last year reduced the discount for all fleet customers using loyalty programmes from 0.75 per cent to 0.25 per cent. Officials said discounts on debit cards and other modes of digital payments will continue for now.
Beginning December 13, 2016, a discount of 0.75 per cent was offered to those using plastic money to buy petrol and diesel. This discount was given by way of cashback, which has been credited to the buyer's account within three days of the transaction.
The 0.75 per cent discount on payments made using either credit/debit cards, e-wallets or mobile wallets translated into a rebate of about 50 paise a litre on petrol and diesel. Petrol currently costs at Rs 74.13 per litre in Delhi, while a litre of diesel costs Rs 67.07.