NEW YORK - A Forbes article earlier this week by Douglas Kantor, counsel to the Merchants Payments Coalition, detailed the impact of interchange fees on fuel marketers.
"[I]t is so tough to make money selling gasoline at retail," Kantor begins, adding that retailers are often perceived as the bad guys, especially when fuel prices are high.
"They know so little about the industry that it would be laughable - if it weren€™t so deceptive," Kantor said. "During the first quarter, the gasoline retailing industry lost money on gas sales."
Citing data from OPIS, Kantor said retailers sold gas for just 13 cents per gallon more than they paid for it, less than the industry cost average of 15 cents per gallon.
"Many retailers didn€™t pocket anything in the first quarter," Kantor said.
Kantor said the public misperception has been caused by a "sleight of hand by the banks€™ lobbying group," which provided incorrect estimates as to the amount retailers€™ interchange fees have decreased since Durbin took effect in October.
"The estimates are wrong, but that is largely beside the point. It€™s what they did next that is sobering. They claimed retailers were pocketing 100% of that money," Kantor said. "That€™s right. They simply asserted retailers pocketing the money without any investigation or research. So, as many retailers were losing money, the banks claimed every single one of them was not only profiting, but padding profits."
Kantor said the Energy Information Administration has determined competition has forced gas stations to pass through 100% of cost reductions into consumer prices everywhere in the United States.
Citing data provided by NACS, Kantor said gasoline retailers paid more than $11 billion last year, which added an average of 7 cents per gallon to the price of gasoline sold in the United States.
"These facts are simply too damning," Kantor said. "So, they have now started to shout them down by trying to make local businesses the bad guys."
Read what NACS is doing to fight interchange fees.