I was wondering why gasoline prices end in nine tenths of a cent in most places. Such as $3.69 9/10 per gallon. There probably was once a valid reason why this was done but in today's modern world I don't think there is a need any more with digital pumps. What do you think ?
Here's an article that explains it.
Basically, fuel taxes end in fractions of a cent and they add that onto the wholesale price per gallon that they paid, plus a few extra cents for some profit. Wholesale gasoline prices are usually fractions as well, here's this morning's wholesale fuel price at New York Harbor. Currently, it's $2.755 for a gallon of fuel, wholesale.
https://ycharts.com/indicators/new_york_harbor_conventional_gasoline_spot_price
These days 9/10 is a relic from the 1930s when gas was $0.10 or less. Whole cent price changes really made a difference in purchase price. Nowadays, it's purely a marketing thing. Your cent isn't worth all that much in gasoline. When you see that price, you "think" you're paying $2.99 a gallon, when you're really paying $3.00 a gallon. The dispenser won't dispense exactly one gallon for the advertised price. Look at your pump and watch the price/ volume next time you get gas. When it hits the whole gallon amount, it will be slightly over cost and volume. If you stop at $2.99, it won't be exactly 1 gallon.
great video, thank you
It’s a psychological trick
$3.69 9/10 looks cheaper than $3.70
same how supermarkets put prices like $3.99
Similar here in Europe. Diesel 1.432€/L.
I believe its a carry over from WW2 to help pay for the war.
Same as the old excise tax on tires.
Same bs all retailers pull"$3.99! It's only $3!" When you're a cent off from $4. Or $29,999. All mind games.
