b' Member NewsRules & RegulationsFACTORS IMPACTING PRICES AT THE PUMP What do we pay for per gallon of retail regular grade gasoline?Issue Background: 4.Credit/Debit Card Fees:Credit card companies and the Seventy percent of Americanssupport the ban on Russiantop five card issuing banks take between two and three per-oil imports regardless of the rising fuel costs. However, somecent of every credit card purchase. Furthermore, card compa-Americans are falsely directing blame to gas station owners fornies collect an outrageous percent of the total per gallon price increased prices at the pump. The retail motor fuels market is thein interchange fees. Interchange fees are the second highest most competitive marketplace in the country. Retailers post theiroperating cost for retailers. In 2019, the industrys pre-tax prices on big signs where a one-penny difference can determineprofit was $11.9 billion and card fees paid by the industry where customers choose to fill up. Unfortunately, what the mar- were $11.8 billion. EMA urges Congress to introduce legisla-ket is currently experiencing is the whiplash effect of prices duetion to require two network routing options on credit cards to Russias invasion of Ukraine. Crude oil is traded in a globalsimilar to how debit cards currently operate.market where prices are ultimately set by worldwide supply5.Taxes : The Federal Government imposes a tax of 18.4 cents and demand and influenced by Wall Street commodity traderson each gallon of gasoline, and the States levy an average tax perceptions about future supply and demand. of 22 cents on each gallon. This does not account for all state and local taxes, such as sales taxes, which can range from 7.5 Factors Impacting Prices at the Pump to 37.5 cents per gallon across states.The U.S. motor fuels production and distribution system is6. Oil Futures Market Speculation:Futures markets are extremely complex and few people outside of the motor fuelsthe dominant wholesale pricing mechanism for daily motor industry truly understand how the retail price of gasoline isfuels and heating oil prices. The influx of non-commercial determined: commodity market speculative trades (pension, hedge and en-dowment funds) creates artificial demand for energy products 1. Crude Oil:The price of crude oil is the biggest contributorwhich destroys the price discovery mechanism that com-to the price of gasoline, accounting for 54 percent of the pricemodity markets provide to physical hedgers such as energy per gallon consumers paid over the last decade. Worldwidemarketers, airlines and farmers. EMA supports an open and industrial growth and geo-political issues as well as U.S.transparent energy futures market with aggregate position failure to issue quarterly lease sales for onshore energy devel- limits on non-commercial traders.opment and a new five-year plan for offshore development; cancellation of Keystone XL; and the Jones Act contribute to high energy prices.2. Refining Capacity:A new U.S. oil refinery withsignificant downstream unitcapacity has not been builtsince 1977 and dozens havebeen shuttered. Cumbersomeenvironmental regulations and permitting processes make refiner plans to maintain or expandproduction capacity difficult.3. Boutique/Renewable Fuels Mandates:Some states andlocalities impose specific recipes for gasoline and diesel supplies sold within their jurisdiction. These boutique fuels requirements create supply shortages, and, in most circumstances, supplyshortages foster higher prices.38 www.wpma.com / Summer 2022'