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Cash payments spike at petrol pumps; Rs 2,000 notes make 90% of cash transactions, says dealers’ body

Cash transactions have sharply risen at petrol pumps and cash-paying customers are using Rs 2000 notes in nine out of ten cases following Friday’s withdrawal of the high-value banknote, the All-India Petroleum Dealers Association (AIPDA) has said.

“The RBI decision to withdraw Rs 2000 note has again created the same difficult situation at petrol pumps across the country as was faced during the 2016 demonetization drive,” AIPDA said in a statement, adding that a “majority of the customers are trying to use Rs 2000 note even for small purchase of Rs 100-200.”

“Before this Rs 2000 withdrawal we used to receive only 10% of our cash sales through Rs 2000 notes but now almost 90% of cash received at our outlets is in the form of Rs 2000 notes only and we have to deposit the same in banks on a daily basis,” the association said.

The digital payments, which used to be 40% of daily sales at pumps, have dropped to 10% while cash sales have increased dramatically, it said, warning of future troubles for dealers.

“We are afraid that we would again face problems due to the current scenario as was faced after demonetization as most of the dealers received Income Tax notices/raids without any fault of them as they received more payments during that period due to increased sales and outstanding payment from credit customers,” the association said.

It also urged the RBI to direct banks to provide a sufficient volume of lower-value notes to petrol pump dealers so that they can smoothly serve fuel buyers.
All-India Petroleum Dealers Association is the largest association of petrol pump dealers in the country.

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