The main aim of the project is to design a system which is capable of automatically deducting the amount for petrol dispensed from user card based on RFID technology.The controlling device of the whole system is a Microcontroller. GSM modem, Buzzer and RFID reader are interfaced to Microcontroller. We make use of both these devices to construct a prepaid card for petrol station systems based on RFID. The concerned person of the vehicle should initially deposit money in the card using SMS. The RFID reader is interfaced to the on board computer is commonly termed as micro controller. The user can also select the quantity of required petrol from selection buttons. The reader decodes the RFID tag which is with the vehicle and the amount is reduced from the prepaid card and this information is fed as input to microcontroller. The controller reads this input and controller starts operating the dispensing motors until the required amount of petrol is dispensed into the vehicle. The dispensing system forms the output module and is interfaced to the same onboard computer. The input from RFID is also displayed on the Graphical LCD for the acknowledgement of the user.