The State Bank of Pakistan has extended its concessionary pricing mechanism for payment card transactions at fuel stations, keeping the Merchant Discount Rate (MDR) capped at Re1.00 per litre and the Interchange Reimbursement Fee (IRF) at Re0.20 per litre. The instructions, issued through PSP&OD Circular Letter No. 01 of 2026 on 3 August 2026, took effect immediately and will remain in force until 31 January 2027.
The circular, signed by Director Qazi Shoaib Ahmad, applies to all payment cards issued in Pakistan and covers every card-present transaction at fuel stations for the purchase of fuel and related products. It builds on PSP&OD Circular Letter No. 01 of 2023, which first introduced the concessionary rates.
What the caps replace
Before the concessionary mechanism, fuel stations paid bank charges of roughly 0.8 percent on card transactions, equivalent to about Rs2.40 per litre, according to petroleum dealers cited by Business Recorder. The Re1.00-per-litre MDR cap cuts that cost by more than half, removing what the industry had described as a barrier to wider card acceptance at pumps.
Who must comply
The circular is addressed to all banks, microfinance banks, electronic money institutions, payment system operators, and payment service providers: collectively termed regulated entities. These institutions must now ensure their merchant fuel stations can accept card payments under the capped rates.
Raast QR deployment ordered
Beyond the card-fee caps, the SBP has directed every regulated entity to actively engage with its fuel-station merchants to enable and make available Raast QR-based payment acceptance for fuel and related purchases. This marks a parallel push to give consumers an interoperable, instant-payment alternative to card swipes at the pump.
What the review clause means
The SBP has stated it will revisit the instructions on or around 31 January 2027, assessing the market response to the pricing mechanism before deciding whether to extend, adjust, or withdraw the caps. The Pakistan Petroleum Dealers Association welcomed the move but noted it had sought the complete elimination of bank charges and expects further reductions after consultation.
What consumers should expect
For ordinary debit and credit cardholders, the circular does not impose any new steps. Consumers can continue using their cards at fuel stations as before. The practical change is that more pumps may now accept cards: and, over the coming months, Raast QR: because the lower per-litre fees make card acceptance less costly for station operators.
What the evidence does not yet establish is how many fuel stations currently lack card terminals, what proportion are expected to add them before the January 2027 deadline, and whether any enforcement mechanism exists for stations that refuse to enable Raast QR despite their acquiring bank's engagement.