Why do gas prices always end in nine-tenths?
by 
Bruce Farrin
ANSWERS: 6
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Because it does not sound as bad a whole 1 %
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OPEC controls and sets the price for the worlds oil. Gas pumps are incredibly accurate in monitoring every drop. A gallon of gas priced at say...$1.75 6/10 is actually $1.76 a gallon. Its an advertising gimmick they use to make one gas stations price look cheaper than the other. They use simple mathematical fractions to get that extra penny from you. It adds up.
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It's actually a mathematical formula.. if you go buy one gallon of gas, they can't realistically charge you the 3 digit number and 9/10 of a penny and give you 1/10 of a penny change so every transaction will either be rounded up to the next 10th of a cent or your amount pumped will be rounded DOWN to the next whole cent's worth of fuel. This translates to MILLIONS of dollars in cash and fuel savings that don't even get registered on the books.
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It is for exactly the same reason that almost all retail products are priced in this fashion: it doesn't look as expensive as it is to everyone. If, for example, a person looks at a pricetag of $9.95, the numbers preceeding the decimal point tend to be retained by the consumer - the price is effectively rounded down. Therefore, $9.99 becomes $9. A car priced at $19,995 becomes $19,000. A lot of people don't think this way and they round that $9.99 to $10 and that $19,995 to $20,000, but enough mentally round down that retailers continue to follow the practice. Where I live, gas prices don't end in the .9 fraction any more than they do any other number. The price difference between one gas station selling gas at 82.6 /litre and one down the street selling it at 82.5 /litre is insignificant - a big fat nickel for a complete fill with my car. At that rate, it would take me about 9 months to save a lousy buck.
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Back when gasolene prices were at 19 cents a gallon, or less, the 9/10s was somewhat significant. Going from 19 to 20 was a big step and retailers wanted to not be the first to go over the line to the next dollar. If retailers were interested in appearing to be low priced, they would sell gas for, say $1.99, or $2.59. These days, they don't seem to be too worried about it.
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THE EXTRA TENTH SAVES ON THAT EXTRA NEXT TAX VALUE.
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