In Bangalore (INDIA), when you purchase fuel with cash, you never have to pay for a 'fuel surcharge'. When you pay for it using your credit or debit card, a fuel surcharge is added on later? What and why do they do this?


Credit card companies charge 2%-3% transaction fees. On typical retail transactions [buying clothes, groceries, electronic goods, etc] the margin is in excess of 10-30%. Hence the Merchants tend to absorb the cost of card from profit margin.

In petrol transactions, the dealer make a fixed amount per liter of pertol/desiel sold. They cannot absorb the loss of 3%. Hence they charge additional Fuel surcharge to make up for that loss.

Some companies will lift the surcharge fee with a minimum transaction amount. For example, many fuel stations won't apply the surcharge if you buy at least 400 Rupees of fuel. There are also Card Tie-up where by Card Issuing Companies absorb this cost and hence no additional surcharge.

  • 2
    Note that Visa does not permit this: visa.co.in/merchants/acceptingvisa/guidelines.shtml – ChrisInEdmonton Apr 24 '14 at 19:46
  • 1
    @ChrisInEdmonton In India as the price of the fuel is regulated and the pump owners get a fixed comission, there is an exception made by Central Banks to allow fuel surcharge on this transaction to compensate the margin asked by Cards [Merchant Bank, Visa, issuing Bank] – Dheer Apr 25 '14 at 6:59
  • 1
    @ChrisInEdmonton a lot of people point to those guidelines, but they are not a condition of your merchant agreement with Visa - they are merely guidelines, nothing more. Merchants are restricted by what is in their merchant agreements, nothing more. – Moo Dec 23 '16 at 9:59

protected by Dheer Feb 3 '17 at 7:43

Thank you for your interest in this question. Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).

Would you like to answer one of these unanswered questions instead?

Not the answer you're looking for? Browse other questions tagged or ask your own question.