No Script Javascript is disabled. Please enable it for better working experience.
Advertisement
Thursday 30 May, 2024
Advertisement

Petrol Stations Will No Longer Accept Debit/Credit Cards for Payment

BY Faizan Ahmed Sep 06, 2022. 11:02 am UPDATED: Sep 06, 2022. 11:02 am

Advertisement

The majority of petrol stations operated by Oil Market Companies (OMCs) have stopped accepting credit/debit card payments for gasoline and diesel due to the high merchant discount rate (MDR) (1.5 percent) imposed by commercial banks.

When a customer uses a credit or debit card to make a purchase, an OMC official claimed to a national newspaper that banks are keeping Rs. 3.45 in MDR from the margin of Rs. 3.68 on one litre of gasoline and diesel. This could reduce the OMC margin to just Rs. 0.23 per litre and jeopardise the OMCs’ ability to survive.

If the average price of gasoline and fuel were considered to be Rs. 230 per litre, the value of bank card sales came to Rs. 92 billion per year. The country used approximately 20 billion litres of motor gasoline and diesel annually, of which 400 million litres were sold using credit and debit cards.

Banks impose 1.5 percent MDR on a litre of gasoline and make Rs. 1.38 billion in MDR from OMC profits rather than from customer purchases. The OMCs make Rs. 1.472 billion in annual profit from bank card sales, of which Rs. 1.38 billion is paid to banks, leaving a net profit margin of Rs. 92 million. Due to this, OMCs are unable to accept credit or debit cards for fuel purchases.

The MDR should be lowered from 1.5 percent to 0.3 percent, according to the latter proposition. The oil sector understands the need of enhancing Pakistan’s digital payment infrastructure, but it cannot continue to operate at the current level of MDR charges on fuel transactions.

It is important to note that on August 22, 2022, the State Bank of Pakistan (SBP) received a letter from the Oil Companies Advisory Council (OCAC) on behalf of the Oil Marketing Companies (OMCs) addressing the problem of banks charging higher MDR.

The OCAC made a case for the OMCs in the letter and asked for a review of the MDR rate of 1.5 percent on fuel purchases made with credit or debit cards. It claimed that while the MDR varies across the industry, banks charge an average of 1.5 percent at gas stations across the nation, and the cost is borne by the OMCs and their dealers (petrol pump owners and operators).

The OCAC suggested to the SBP governor that the MDR on fuel purchased be capped at 0.3 percent in light of the high turnover of fuel and to help customers without placing an undue burden on the OMCs and dealers.

Advertisement

Related Articles

Who is Zara Ansari? Ashfaq Satti’s third wife
Pakistan

Who is Zara Ansari? Ashfaq Satti’s third wife

Nomaika Satti, wife of ARY News anchorperson Ashfaque Satti, has made a...

Coldwave to hit Pakistan after Oct 17
Latest

Coldwave to hit Pakistan after Oct 17

According to the Pakistan Meteorological Department (PMD) on Thursday, a cold wave...

Maryam Nawaz's son Junaid Safdar divorce Ayesha
Latest

Maryam Nawaz's son Junaid Safdar divorce Ayesha

Junaid Safdar, the son of Pakistan Muslim League-Nawaz (PML-N) Maryam Nawaz, announced...

Petrol Price in Pakistan reduced by Rs. 8 from 1st October
Latest

Petrol Price in Pakistan reduced by Rs. 8 from 1st October

After three large increases in the previous fortnightly reviews, the caretaker government...

Punjab Announces Holiday for Schools on 28 September 2023 Amid Pink Eye Outbreak
Latest

Punjab Announces Holiday for Schools on 28 September 2023 Amid Pink Eye Outbreak

Due to an increase in pink eye (conjunctivitis) instances, Punjab's temporary Chief...

When will it rain in Karachi?
Latest

When will it rain in Karachi?

According to the Pakistan Meteorological Department's (PMD) latest forecast, certain districts of...

Advertisement

Latest News

Who is Ava Louise? OnlyFans model who flashed portal
World

Who is Ava Louise? OnlyFans model who flashed portal

The annoying OnlyFans model claims that she lifted her top because she...

Madison Bergmann arrested for ‘making out’ with 5th-grader
US

Madison Bergmann arrested for ‘making out’ with 5th-grader

Less than three months before her wedding, a 24-year-old elementary school teacher...

Sgt. Colin Arslanbas killed in training accident
US

Sgt. Colin Arslanbas killed in training accident

Military authorities have revealed the identify of the Marine from North Carolina...

MMA FIGHTER Ali Heibati banned for kicking RING GIRL Maria
Viral

MMA FIGHTER Ali Heibati banned for kicking RING GIRL Maria

Ali Heibati, an MMA fighter, received a lifelong ban for his shameful...

Advertisement