Pain at the Pump

Pain at the Pump

Congress Gave Gas Retailers $1 Billion Annual Subsidy

Consumers Aren’t Seeing a Penny of Savings

New research finds that gas retailers are saving $1 billion annually* at the expense of consumers thanks to the Durbin amendment which capped what retailers pay to accept debit interchange beginning in October 2011. According to the US Energy Information Administration, nearly 134 billion gallons of gas was sold in 2011.  Approximately 48 billion gallons were purchased using debit – the type of payment impacted by the Durbin amendment, which reduced rates by about 70% for this category.  However, there continues to be no evidence that retailers are passing along savings from this windfall – even at gas stations, where debit is the overwhelmingly most popular form of payment.

According to new research by Phoenix Marketing International, half of all non-cash payments for fuel are made with a debit card (36 percent of all payments including cash), making it overwhelmingly the most popular payment choice at the pump. “For gas station purchases, consumer preference for debit cards has increased substantially over the past several years – at the expense of cash, checks, and credit cards,” explains Greg Weed of Phoenix Marketing International.  The research among 5,166 consumers reporting on recent gas stations purchases found that the debit card share of both transactions and dollars was higher than any other payment method.  “Among households with income of less than $50,000, debit card share of gas station transactions was twice as high as that of credit cards.”

Retailers promised to pass debit savings on to consumers. By comparing the costs per gallon and the interchange rates for debit and credit purchases[1], consumers can use our Debit Discount for Gas Calculator to determine the amount of savings retailers should be passing on to them at the pump.



Congress transferred $1 billion directly to gasoline retailers and in return, convenience store merchants who sell gas raised prices, demanded more revenue and attempted to deflect blame toward the industry that provided them with the convenience of electronic payments from the beginning.

The convenience store industry is now fabricating myths about how interchange fees impact gas prices.  Following are a few important facts surrounding the cost of payments for consumer gas purchases.


With Gas at April 12, 2012 Levels
Gallons/Year (2011 Us Energy Information Administration) 133,925,778,000
 $/Gallon (Calculated below)  $3.94
 % Debit (Phoenix Report)  36%
 Average Debit Interchange/Gallon Pre-Durbin  $0.0453
 Average Debit Interchange/Gallon Post-Durbin  $0.0157
 Durbin Debit IC Savings/Gallon  $0.0295
 Gallons Paid by Debit Annually  48,213,280,080
 DURBIN SUBSIDY  $1,424,186,592
Est. Percentage of debit transaction value at non-exempt financial institutions  78.6%
Total Durbin Subsidy for Gas Retailers  $1,119,410,662


 Price Per Gallon (AAA website April 12, 2012)
Regular  85.00%  $3.907
Mid-Grade  8.90%  $4.043
Premium  6.10%  $4.174
Average PPG $3.9354


[1] Estimates based on data from leading payment card networks.