Following Personal Finance’s lead story looking at methods of paying for petrol and the associated costs – Standard Bank says it is reviewing its position on the fees and interest it charges clients who use a credit card to pay for petrol.

Personal Finance reported that the big four retail banks, including Standard Bank, all treat petrol purchases on a credit card like any other retail purchase: in other words, there is no transaction fee and clients enjoy the usual interest-free period applicable to their card.

However, in response to the story, readers who bank with Standard Bank reported that they are charged transaction fees and interest from day one when paying for petrol with their credit cards.

Although the information carried in the story was supplied and checked by Standard Bank before publication, it was incorrect.

In fact, Standard Bank charges a transaction fee of R3.85 and interest from the time of purchase when you buy petrol on your credit card.

Sugendhree Reddy, the director of banking products at Standard Bank, says that “no one at the bank knew” that charges and interest apply to fuel purchases on the bank’s credit cards.

She says queries by Personal Finance readers have “raised a red flag within the bank”.

“We acknowledge that fuel purchases on a credit card are treated as a cash advance, meaning we charge a transaction fee and interest from the transaction date. But Standard Bank is reconsidering its position. We would have to make system changes, which take time, but by the end of January we would like to have rectified this,” Reddy says.

The Payments Association of South Africa (Pasa) is tasked with ensuring that South Africa’s payments system is world-class and aligned with the South African Reserve Bank’s policies and principles in respect of the National Payment System.

According to Pasa, “a fuel purchase must be treated as a retail purchase” and not as a cash withdrawal, Arif Ismail, the executive of payments strategy, research and communication at Pasa, says.

But Pasa does not regulate pricing – it is up to each bank to decide what it charges for a retail purchase, Ismail says.

Typically, banks do not charge clients a swipe fee for purchases on a credit card, and Standard Bank’s charge for fuel purchases on its credit cards appears to be the only anomaly.

Personal Finance contacted Absa, First National Bank (FNB) and Nedbank again this week to verify the accuracy of information supplied for last week’s article. All three banks confirmed that they treat petrol purchases on a credit card as regular retail purchases and not as cash withdrawals.

The law no longer prohibits petrol from being sold on credit.

In July 2009, the Department of Energy introduced a regulation under the Petroleum Products Act allowing for the use of payment cards to pay for petrol products.

Up until the regulation was passed, South Africa was one of a few countries in the world which prohibited the buying of fuel on credit, “and it was an absurdity”, Tony Twine, a senior economist and director of Econometrix, says.

“The regulation (9117) does not force the banks to treat petrol sales as extensions of cash credit,” Twine says.

Getting clear and accurate information from the banks is not easy. Be prepared to mine your bank’s website and brave its call centre. Call centre staff are often not adequately informed. An operator at FNB card division yesterday gave inaccurate information – checked by his supervisor – to Personal Finance telephonically and via email.