Fuel surcharges are additional fees that merchants impose on fuel transactions when you make payment through your credit cards. This fee ranges from 1% -2.5% of the total fuel transaction amount.
You can avoid fuel surcharges on your credit card by looking for credit cards that offer fuel surcharge waivers. Many banks and credit card issuers offer fuel surcharge waivers as part of their rewards program or other promotions.
Fuel Surcharge Calculations
When you use your credit card for fuel purchases and are not eligible for a fuel surcharge waiver, you’ll have to pay 1% of the fuel transaction amount as the surcharge fee, along with 18% GST on the surcharge amount.
If you are eligible for a fuel surcharge waiver, the surcharge amount will be credited back to your credit account.
For Example,
If you make a fuel purchase worth Rs. 3,000 and the fuel surcharge is 1%.
In this case, the fuel surcharge will be Rs. 30, and the GST payable on it will be Rs. 5.40 (18% of the surcharge amount).
In total, you’ll end up paying Rs. 3,035.40 (Rs. 3,000 for fuel + Rs. 30 for fuel surcharge + Rs. 5.40 for GST on fuel surcharge).
If you are eligible for a fuel surcharge waiver, you will receive a credit of Rs. 30 to your credit account as a fuel surcharge waiver. However, you will only be liable to pay a 18% tax on the surcharge amount, which is Rs. 5.40
Fuel Surcharge Waiver Condition
To get the benefit of a fuel surcharge waiver, you must check if your credit card offers fuel surcharge waiver or not.
Generally, credit cards offer a 1% fuel surcharge waiver on a minimum transaction amount of Rs. 400. The credit card also comes with a maximum waiver cap for each statement cycle.
For example,
HDFC Infinia Metal Edition credit card offers fuel surcharge waiver condition:
- 1% fuel surcharge waiver on all fuel purchases between Rs. 400 and Rs. 1,00,000.
- The maximum waiver cap of Rs. 1,000 each month.
Strategy to Avoid Fuel Surcharge on Credit Card
The most effective strategy to avoid fuel surcharges on your credit card is to use a credit card that offers a fuel surcharge waiver. Some credit cards offer this benefit as a reward or cashback for using your cards to make fuel purchases.
For example, HDFC Bank, ICICI Bank, and Axisbank offer credit cards that provide a fuel surcharge waiver.
To implement this strategy, you need to follow these steps:
Step #1: Choose the Right Credit Card
To take advantage of the fuel surcharge waiver, you need to choose a credit card that offers this benefit. You can compare the features and benefits of different credit cards and choose one that suits your needs and spending habits.
Step #2: Check the Terms and Conditions
Before using your credit card for fuel purchases, make sure to read the terms and conditions carefully. The fuel surcharge waiver may be subject to certain conditions, such as a minimum transaction amount or a maximum waiver amount per transaction.
Step 3: Use the Credit Card at Fuel Stations
Once you have chosen the right credit card and checked the terms and conditions, you can use the card to pay for fuel at participating fuel stations. The fuel surcharge waiver will be applied automatically, and still you will have to pay GST on the surcharge amount.
Credit Cards with Fuel Benefits
To help you choose the right credit card for fuel purchases, here is a comparison table of some popular credit cards that offer fuel benefits:
| Card Name | Fuel Cashback | Maximum Capping |
| Standard chartered super value titanium credit card | 5% cashback on fuel | Rs 100 per transaction and Rs 200 per month |
| SC Platinum rewards credit card | 5 reward points for every Rs. 150 on fuel1RP = .25 Paise | No monthly cap |
| RBL Platinum Maxima credit card | 10 reward points per Rs. 100 spent on fuel(10 reward points = Rs 2.5) | 1000 Reward Points per month |
| BPCL SBI Card OCTANE | 25 Reward Points per Rs. 100 spent at BPCL fuel stations. | 2500 Reward Points per billing cycle |
| ICICI HPCL Coral Amex Credit Card | 2.5% cashback on fuel purchase at the HPCL pumps | Rs 100 per month |
| ICICI Bank HPCL Super Saver Credit Card | 4% cashback on fuel purchases at HPCL pumps 1.5% additional value back on using the HP Pay app | Rs. 200 per month |
| HPCL Bank of Baroda (BoB) ENERGIE Credit Card | 24 Reward Points on every Rs. 150 spent on fuel purchases at HPCL pumps | 1,000 Reward Points per statement cycle |
| HDFC Bharat Cashback Credit Card | 5% cashback on fuel expenses | Rs. 150 per month |
| IndianOil HDFC Bank Credit Card | 5% of spends as Fuel Points at IndianOil | 250 Fuel Points per month in the first 6 months, after this 150 fuel points |
| Indian Oil Axis Bank Credit Card | 20 Reward Points per Rs. 100 on fuel transactions at IOCL stations | 1000 Points per month |
For more detailed features & benefits, you can also read the best fuel credit cards in India.
Credit Cards for Fuel Surcharge Waiver Benefits
Here is the list of some credit cards that offer a 1% fuel surcharge waiver.
- HDFC Millennia
- ICICI Platinum
- AMEX Rewards
- Axis Bank Ace
- Kotak Royale Signature
- Yes First Exclusive
- HDFC Diners Club Black
- SBI Prime
- HDFC Regalia
- SBI Elite
- ICICI Sapphiro
- IDFC FIRST Classic Credit Card
- IndusInd Iconia American Express
- Amex Travel Platinum
- Yes Bank First Preferred
Conclusion
You should only use a credit card when it offers you benefits for fuel transactions, such as reward points, cashback, and fuel surcharge waivers. Otherwise, you should prefer the fuel payment through cash or UPI to avoid the fuel surcharge.
