HYDERABAD: The United Petroleum Dealers Association has written to the Ministry of Petroleum seeking an exemption from the merchant discount rate (MDR), or digital transaction charges, imposed on electronic payments. The association said petroleum dealers and retailers across India were operating on thin margins while petrol and diesel prices were determined by oil marketing companies.

The dealers have no flexibility to change the prices charged to customers because their commissions are fixed by the oil marketing companies. The association said this arrangement left retailers bearing the impact of digital transaction costs despite having limited control over either the selling price or their earnings.

Association general secretary M. Amarender Reddy said dealer margins had not increased for around 10 years. He said several dealers were facing financial difficulties, adding that the business involved high sales volumes but that these volumes directly affected dealers because of the costs associated with each transaction.

The association’s letter to the ministry seeks relief from MDR charges as part of efforts to protect dealer margins. Reddy said the request was at an initial stage and that the dealers would decide on their next course of action if the government did not respond to their demand. The association has not announced details of any proposed further measures.

The demand comes as fuel retailers continue to process payments through digital channels while operating under commissions set by the companies that market petrol and diesel. The association’s position is that exempting petroleum dealers from MDR would reduce a cost that they cannot recover by independently adjusting fuel prices. The letter asks the ministry to consider the exemption for dealers and retailers across the country.