Consumers end up paying more to avail Rs 5 LPG discount in Hubballi..

Digital transactions are not cheap as we are increasingly realising. Unlike cash which does not involve any transaction cost while paying digital payments require a fee. These payment services are offered by a private firm which has to earn its revenues. So someone has to pay.

People in Hubbali in Karnataka just figured this bit. In order to avail Rs 5 discount on booking a gas cylinder when paid digitially, they ended up paying more via commissions!:

In a bid to encourage cashless transactions, the union oil ministry on January 3 announced that LPG consumers would get a Rs 5 discount on every refill, which was booked and paid for online. However, those who tried to pay their bills using net banking facility had to cough up Rs 7 to Rs 8 as transaction charge to get the Rs 5 discount.

Sunil Nalavade, a HP Gas consumer, said that he had to cough up Rs 7 as transaction charge. “When they announce a rebate, the ministry and the departments concerned should think twice. To get a five-rupee rebate, we are spending Rs 7, which means that we are paying two rupees extra. They should at least waive off transaction charges, if they want to facilitate cashless modes of payment for LPG,” Nalavade said.

The situation was no different for Mayur Patil, an Indane Gas consumer. “I had to pay Rs 8 as transaction charges. This is a misleading announcement by the government,” Patil said. However, Patil pointed out that the transaction charge was just Rs 1.51 for debit card payment. “They also charge 23 paise as service tax,” he added.

Secretary of Consumer Protection and Research Foundation, RS Patil Kulkarni dubbed it an unfair trade practice. “I am a Bharat Gas consumer, and had to pay Rs 6.65 as transaction charge. When the government announces such rebates, they should make these things clear,” he added.

Indane Gas field officer SK Ganesan said that the charges were being levied by the banks. Distributor for HP Gas in Navanagar, Hubballi, Basavaraj Halaharvi echoed Ganesan’s observations. “We are not even aware when the discount came into effect.While some are saying it’s already been implemented, a few are saying otherwise. We are concerned only with delivery . When our consumers book online, we deliver accordingly,” Halaharvi said.

All this is a result of very hasty execution.

There are already parallels in railway booking where you pay more via digital booking compared to window booking. But in this case, people pay as they figure the other costs like queue costs, travel to the window counter costs and so on.

In case of gas booking these things don’t matter as a cylinder comes to your home from the agency. Moreover Rs 5 saving is hardly as much as one saves in case of rail bookings. One is wondering why people did not cancel the booking on realising more is being charged?

These are all behavioral changes which take time. One should balance the costs and benefits and decide which is a better choice – offline or online. In case of railways the benefits are apparent. In case of LPG booking a Rs 5 discount is hardly sufficient and in this case people actually ended up paying more.

The government has to think through these things very carefully. Digital transactions unless subsidised by the government or run by the govt  do not come for free.

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