WASHINGTON -- Ten months after the American retailers won a lobbying victory on Capitol Hill against debit card swipe fees, a trade group representing convenience stores is pushing for the government to crack down on similar fees for credit cards. According to a new report from the National Association of Convenience Stores, swipe fees were adding roughly 7 cents per gallon to the price of gas at the beginning of April, with credit card swipe fees alone costing convenience stores $11.1 billion in 2011.
Although financial speculation in the oil futures markets receives far more attention, swipe fees also serve as a way for Wall Street to profit from consumer pain at the pump. In return for the privilege of accepting plastic, banks charge retailers a fee for every card swipe. On credit cards, that fee is a percentage of the total price tag of each purchase. So the more a customer spends on gas, the higher the fee charged to retailers. Retailers pass these costs on to consumers in the form of higher prices.
"When fuel prices go up, banks receive a windfall without providing any additional services or value to merchants or customers," states the National Association of Convenience Stores report.
In the 2010 Wall Street reform law, retailers successfully lobbied Congress to crack down on swipe fees associated with debit cards. Banks then sought to repeal that provision, waging an aggressive lobbying campaign in the Senate for much of 2011. Congress upheld the crackdown, however, and the Federal Reserve issued new regulations in late June capping debit card swipe fees at 24 cents per transaction, on average, down from the then-existing average of 44 cents. (The central bank had previously proposed a 12-cent limit.)
But credit card swipe fees, which account for the lion's share of the swipe fee market, remained unregulated. According to the new report, those fees climbed 23 percent in 2011 to $11.1 billion. Motor fuel sales at convenience stores totaled $486 billion last year.
If the government stepped in with new regulations, it remains unclear exactly how much of that reduction in swipe fees retailers would actually pass on to their customers in the form of lower prices. Merchants wouldn't bother lobbying on swipe fees unless they saw some benefit in it for themselves. Indeed, the Electronic Payments Coalition, a lobbying front group for banks, argues that the crackdown on debit card swipe fees has not driven down prices.
And consumer advocates generally have higher priorities. According to the new report, the higher swipe fees triggered by elevated gas prices will add only about $30 in additional expenses for the "average driver" this year.
High levels of Wall Street speculation may be playing a more significant role than swipe fees in raising the price of gas. According to another recent report, by economists at the St. Louis Federal Reserve, speculation accounted for 15 percent of the overall rise in oil prices over the past decade. During specific periods of time, however, speculation may play a much greater role in driving the price of oil up -- or down.
Related on HuffPost:
How will Donald Trump’s first 100 days impact YOU? Subscribe, choose the community that you most identify with or want to learn more about and we’ll send you the news that matters most once a week throughout Trump’s first 100 days in office. Learn more