Pakistan's central bank has stepped in to curb what petroleum dealers called crippling transaction costs on digital fuel sales, setting a fixed ceiling that replaces bank-discretionary fees. The move follows months of mounting pressure from fuel station operators, who argued that unpredictable charges were eroding their already thin margins and pushing them toward non-compliant practices. Main Developments Under the new State Bank of Pakistan (SBP) directive, merchant discount rates for card-based fuel purchases are capped at Re1 per litre, while online transactions via QR codes and the Raast instant payment system are limited to 20 paisas per litre. Interchange reimbursement fees for card-present transactions are likewise restricted to Rs0.20 per litre. Read also: Pakistan's Cotton Arrivals Surge 32% on Sindh's Record Crop These ceilings apply to all payment cards issued in Pakistan and remain in effect until January 31, 2027. The central bank has instructed all banks and regulated entities to use the intervening six months to ensure fuel stations can accept Raast QR payments, with a review of the pricing mechanism scheduled for around January next year. Previously, banks set these fees independently, with rates fluctuating between 0.7pc and 1.5pc per transaction. That translated into costs of Rs3-4 per litre — a figure that dealers say was untenable when compared against their fixed commission of Rs8.64 per litre. Background Hassan Shah, spokesperson for the All Pakistan Petroleum Dealers Association (APPDA), explained that the old charges were disproportionately high relative to the regulated dealer commission. After deducting a 12pc withholding tax and other fixed costs, he said dealers were left with "little option but to adopt dishonest means to survive." The situation worsened with the introduction of the daily pricing mechanism, which created a 48-hour lag between booking and delivery of petroleum products while prices changed every 24 hours. "We were not only suffering losses but always remained confused," Shah told Dawn, noting that the fee cap was one of several demands in a charter recently presented to the government. APPDA has cautiously welcomed the notification as a step toward expanding digital payments nationwide, but maintains that even the revised rates are "higher than economically justified." The association points out that a modern point-of-sale terminal costs roughly Rs30,000 as a one-time investment, with monthly operating expenses typically under Rs5,000 — costs it argues can be recovered without such significant per-litre charges. Fuel station operators currently earn only Rs8.64 per litre in commission, from which substantial withholding tax is deducted at source. The remaining margin must cover salaries, electricity, rent, financing costs, compliance expenses, and other operational overheads, making even a Re1 charge a meaningful reduction in an already slim margin. Why It Matters Shah emphasized that fuel is not a luxury but an essential commodity powering the entire economy. "If the objective is to accelerate financial inclusion and digital payments, then digital transactions for fuel should carry the lowest possible acceptance cost," he said, arguing that lower charges would encourage both merchants and consumers to adopt digital payments on a much wider scale. From the dealers' perspective, the greatest incentive to promote Raast QR payments is lower transaction costs. APPDA believes that if QR payments remain cheaper than conventional card payments, fuel station operators will naturally steer customers toward them, creating a self-reinforcing cycle of digital adoption. The association has called for Raast QR transactions to carry either zero MDR or a significantly lower fee than card transactions, with instant, reliable customer payments seamlessly integrated into fuel station operations to avoid delays during peak hours. It also wants banks to offer free QR onboarding, staff training, and technical support, particularly for smaller dealers. Consumer-side incentives such as cashback, reward points, or promotional offers would create demand on both sides of the transaction, APPDA argues. Uninterrupted system availability and quick dispute resolution are equally critical, as fuel stations operate around the clock and any payment failure can directly affect customer service and business continuity. What's Next The SBP will revisit its instructions on or around January 31 next year, assessing market response to the new pricing mechanism before deciding whether adjustments are needed. Banks have been directed to actively engage with fuel station merchants during this period to ensure Raast QR payment acceptance is fully enabled and available. APPDA maintains that if Raast QR payments prove faster, more reliable, and more economical than traditional card payments, fuel station operators will willingly promote them because they benefit both merchants and consumers. The association