BackPetrol dealers face change shortage after ₹2000 note withdrawal
Petrol dealers drew attention to the similarities between the current situation and the challenges experienced during the 2016 demonetisation drive
PremiumThe All India Petroleum Dealers Association, which represents petroleum dealers nationwide, has expressed concerns regarding the recent decision made by the Reserve Bank of India (RBI) to withdraw the ₹2000 note. The association cited difficulties faced by petrol pumps in providing adequate change to customers.
Ajay Bansal, President of the All India Petroleum Dealers Association, drew attention to the similarities between the current situation and the challenges experienced during the 2016 demonetisation drive.
Bansal further highlighted that the withdrawal of the ₹2000 note has resulted in a significant shortage of change at petrol pumps across the country. Many customers continue to use these high-value notes even for small purchases, creating a strain on petrol outlets’ ability to meet the demand for change. Consequently, both dealers and customers are experiencing inconvenience.
Bansal urged customers to consider alternative payment methods such as card or digital payments to alleviate the shortage of change. He also emphasised the need for the RBI to issue guidelines to banks, ensuring an adequate supply of smaller denomination notes specifically for petrol pumps, thereby enabling smooth transactions for customers.
The association expressed concerns about the repercussions of the current situation. Prior to the withdrawal, only 10% of cash sales at petrol outlets were in the form of ₹2000 notes. However, with the majority of cash received now consisting of these high-denomination notes, dealers are required to deposit them in banks on a daily basis. This has raised concerns about potential scrutiny from income tax authorities, as dealers may face unwarranted investigations due to increased sales during this period.
Furthermore, the sudden decline in digital payments, which previously accounted for 40% of daily sales, down to just 10%, has compounded the challenges faced by petroleum dealers. The increasing reliance on cash transactions, driven by customers’ desperation to use ₹2000 notes, may result in further complications with income tax authorities.
The Reserve Bank of India (RBI) on Friday announced the gradual withdrawal of ₹2000 denomination notes from circulation saying that it has served its purpose.
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