Chandigarh: In a joint media briefing convened at Chandigarh Press Club on Wednesday, Rashtriya Jan Udyog Vayapar Sangathan (RJUVS), Federation of All India Petroleum Traders (FAIPT), Petroleum Pump Dealers Association Punjab (PPDAP), and Petroleum Dealers Welfare Association Haryana (PDWAH) raised serious concerns regarding government digital transaction levies, severely inadequate dealer margins, widespread inter-state fuel smuggling, and the growing operational distress suffocating retail fuel outlets across Northern India.
The conference was jointly addressed by Monty Sehgal, National Spokesperson of FAIPT, Paramjit Singh Doaba, President of PPDAP, Sanjeev Chaudhary, President of PDWA Haryana, and Gulshan Dang, Haryana State President of RJUVS.
Addressing the recently introduced Merchant Discount Rate (MDR) charges on UPI payments, the Monty Sehgal strongly criticized the naming convention, stating that calling it a discount is a complete misnomer.
The associations emphasized that there is no discount involved in this charge, characterizing it instead as a digital recovery levy imposed by the government. Although the implementation of these charges has been temporarily deferred until Diwali, the intention remains to enforce them. Because petroleum dealers operate under strictly regulated, fixed margins, absorbing these transaction costs is impossible, said Monty Sehgal.
Consequently, we demanded a complete, one-hundred percent exemption from all MDR charges on petroleum products and retail dealers, Monty informed.
The associations highlighted that retail fuel operators across the country are facing an unprecedented financial crisis and heavy debt burden.
“Dealer’ margin, which were revised in 2017 and given only a nominal increase in late November 2024, remain entirely inadequate to meet fixed establishment costs. Over eighty percent of a dealer’s margin goes directly toward reimbursing fixed operational expenses, including staff salaries, electricity bills, rising bank interest on capital investments, and extensive compliance mandates enforced by Oil Marketing Companies (OMCs).”
The minor margin increase in late 2024 failed to address these inflationary pressures, and low-volume dealers selling less than 100 kilolitres per month received virtually no financial benefit, said Sanjeev Chaudhary.
Moreover we can’t afford to meet proposed MDR charges on digital payments, he asserted.
Paramjit Singh Doaba said,” Following aggressive outlet expansions advertised in 2018 and 2023, the total number of petrol pumps nationwide has crossed one lakh, causing average monthly sales throughput per pump to plummet from 170 kilolitres down to 130 to 140 kilolitres. In Punjab and Haryana, the crisis is far more severe, with average sales dropping below 100 kilolitres per month, pushing numerous outlets to the brink of financial collapse.”
To ensure the basic survival of retail outlets and maintain consumer service quality, the associations appealed to the Central Government and OMCs to urgently revise dealer margins to seven percent of the billed value, with special priority given to the small dealers with 100 kilolitres of volume sold each month. The leadership urged the government to announce this revised seven percent margin structure before Diwali so that dealers can sustainably continue their operations.
“The operational environment at petrol pumps has deteriorated significantly due to low margins and the falling volumes. Thus we urge the government and OMCs to formulate a supportive proposal that ensures low-volume dealers earn enough to meet basic establishment costs.”
The associations appealed to the state governments of Punjab and Haryana to take immediate action against large-scale fuel smuggling occurring from Union Territory Chandigarh into border districts, driven by lower VAT rates in the capital. This tax differential is inflicting severe financial losses on border petrol pump operators while causing massive revenue leakage for both state exchequers. PPDAP and PDWA Haryana urged both state governments to consider equalizing their oil VAT rates with Chandigarh to eliminate illegal fuel trade, protect dealer livelihoods, and safeguard state revenues.
During the conference, the leaders expressed deep grief and unequivocal condemnation regarding the recent horrific incident where a Sales Officer was tragically killed by a dealer’s kin, while discharging his official duty to seal a petrol pump.
The incident was a failure of the system and we also called for a thorough investigation into the extreme pressure points and underlying conditions that led to the tragedy, said Doaba.
