Why Do Gas Stations Add 9/10 Of A Cent To Their Price?

Question

Nobody (including me) really ever thinks about this universal practice that's been around for years.

We all got use to it.

So when you're paying $3.99, your still paying $4.00.

Doesn't sound like much, but what other store or company does this?

You don't go to Wal-Mart and buy a Shirt for $9.99 9/10.

So when did it start?

I'm 40 and I can't remember a time that it wasn't done.

Answer 1

That 9/10 of a cent is for taxes. I am not sure when they started it though, I can't remember either :(

Answer 2

I'm not really sure but I would think is is to cover the extra odd cents that the station owner has to pay for his fuel. It just makes it easy to figure his profit. Say the tank truck order is for 8500 gallons and the price for the station is $3.7967 per gallon. The station owner wants to make around $.05 profit just to cover all the EPA underground tank testing and all the cost to prove his pumps plus what it cost in electricity to run them. When he sets his price to make a sure profit he sets it at $3.849 to cover the$.0067 extra he had to pay. The extra 9/10 is to be sure the 6.7/10 is covered. They started doing it way back when they had to start paying odd cents on what they buy. I'm 53 and its been like that ever sense I can remember. If you think about it this makes sense. The cost of the extra $.0067 on 8500 is $56.99 the station owner has to make that up somehow. So he charges you an extra $.009 per gallon and makes an extra $19.51 selling 8500 gallons of gas. So if the next 850 people go in and buy 10 gallons each person has to pay a little over $.02 cents for a fill up. I hope this will help you to understand.

Answer 3

It isn't taxes. The taxes are much more than a fraction of a cent per gallon. Of course you can't pay 9/10 of a cent, but gasoline is sold in measured amounts, not discrete units. If the cost is 3.999 per gallon, you pay 39.99 for exactly ten gallons. Gas stations set their prices that way because everybody does it. If I owned a gas station, I'd have prices ending with 8/10 or 7/10 so people would think it was cheaper.

Answer 4

The 9/10s is to keep yours and the sellers money acurate. There will always be a little more or little less gas delivered because of things like evaporation and such. Or that held true before computer pumps. Today it's another penny a gallon your cost. It was set at 9/10s to round up never down. So as a consumer today we get ripped 1/10th of a cent on every gallon.

Who else could get away with it?