U.S. gasoline pricing standards

It's very common place. To a consumer $9.99 looks like a better deal than $10.00 (far better than the maths would suggest).

We are funny creatures, humans.

Why not $3.00/gal. instead of $299.9/gal

Gee, gas is real expensive over there ! <LOL>

Hi jack...,

What's it go for in your neck of the woods?

Do you also have the tenths hanging on the end?

"To a consumer $9.99 looks like a better deal than $10.00"

Is that the only reason I wonder?

"Is that the only reason I wonder?"

Yes.

Or we have a huge surplus of '9's.

Psychology is the science of the mind and human behavior. There's a psychological difference between seeing 2.999 ($2....) and $3.00. That's why clothing is $39.99 and an apple pie may be $3.99 instead of $4.00. There is a very practical reason for machining a military rifle for 106 mm (Chinese, Japanese, N. Korean) vs. a U. S. caiber 105 mm. They can fire "our" shells but we can't fire any shells we capture from their stocks...

What's the psychology behind Walmarts pricing then? Everything ends in 88, 78, 74, 54, 94, 96, 66??? ...and they aren't afraid to use nice round numbers like $15.00 or $10.00 but that is only on their mark downs.

We only go down to 2 decimal points for the cents (all hail the metric system).

What's it go for in your neck of the woods?

Sitting down? for the lowest grade (91 octane)......... $8.31 US/Gal.

Still sitting down? I spend a minimum of 1.5 hours a day driving to and from work.

Puts things in perspective doesn't it, and is the reason I don't have a V8 or a hummer .

Wow! At that price seems like a 50 cc motorbike would be attractive. Don't know how attractive that would make your commute though.

I remember when gasoline was .31 cents a gallon (.29 cents when gas stations would have price wars). Sort of gives away my age doesn't it?

And, I am sitting down. Good thing.

Cheers

NO You Don't! 0.31 cents (I insist on putting a 0 before the decimal point to avoid mistakes) is less than one third of a cent. I remember gasoline at $0.19 (19 cents, NOT 0.19 cents) during gas wars, But I don't believe gasoline was ever sold at less than one cent a gallon!

Yikes! and here I was wanting to move to Australia at some point... guess I'll have to rethink that desire...

Locally, (Orlando, FL) our lowest grade of gas (89 octane) is around $3.09(9) a gallon. Unfortunately my truck will run through about 20 gallons of it in a week.

Another odd thing surrounding gas is that typically we've got three grades of gas, Regular (89), Mid-Grade (91) and Premium (93) (or whatever fancy names the local stations want to call them), but recently 7-11 has been putting in 5-grade pumps with 89, 90, 91, 92 and 93 octane outputs. Of course, if one searches hard enough one can find 113 octane pumps at a *very* few stations, though it's Leaded.

"if one searches hard enough one can find 113 octane pumps at a *very* few stations, though it's Leaded"

Where, pray tell?

I believe avgas is a little higher than 113 octane. More like 145+ last time I checked.

Johnjohn,

SUNOCO markets (at select locations) their line of "Cam 2" racing fuels - Cam-2 is available in 110, 112, and 116 Octane.

I recall Cam-2 being sold at a couple of independent distributors out on Long Island (NY) when I was growing up... A few of my "motorhead" friends from high school used to frequent these purveyors to fuel up their barely legal street rods, before heading down to the Freeport raceway, or just go racing in the streets (to quote Mr. Springsteen).

Yes, JMan is right... it was a Sunoco where I bought my quasi-high-octane gas. Being leaded, they have one of the large diesel pump handles on it so you can't fit it into your gas filler on your car... it's only for off-highway vehicles. There was also a performance shop on my way home from work that was a retailer for VP Racing Fuels. Their highest octane fuel was 120 I think, plus they also sold Methanol. The owner was a grade-A dick though, so I stopped buying from them.

Well 91, 95 and 98 are the common ones down here (I use no less than 95). Many of my friends have, or are in the process of, trading in their high-powered sports cars for more efficient ones. As for me, I drive a very efficient 2 litre engine (semi sports) car. The best of both worlds.

Ahhhhh, air conditioning.

The $296.9 is the price to pay to safeguard the oil supply at $3.00.!!!

The x.99 is an old trick and it work every time.

I use it myself, if I buy some computer stuff I Tell my wife it cost slightly more than x thousand instead of almost x+1 thousand.

[quote]Exactly when and where the tenth cent pricing practice was first used to set the cost of a gallon of gasoline has been difficult to determine. Requests for information on this subject addressed to the major oil companies and to the many petroleum marketing associations, with one exception, were not helpful. A response from the Customer Relations Department of Mobil Oil Corporation suggested that tenth cent pricing probably started no earlier than the late 1920s and early 1930s.[/quote]

I could not find any specific references that could be cited as fact but my best guest is that is was started because 9/10ths is not viewed as a cash value so in the average persons mind 2.99 9/10ths is only 2.99 when in fact it is closer to 3.00. Its a game of deception.

Google "history of gasoline pricing" and one will find more than enough stuff to read.

Hi Richard,

'Google "history of gasoline pricing" and one will find more than enough stuff to read.'

I googled a few things before posting this thread but didn't come up with much. What you found was interesting though. Thanks for checking.

I agree. It's probably just mind games that retailers ply on consumers.

My understanding is that goods must be correctly advertised, eg: petrol advertised at under $3 is legal, but they don't have to say how much under. in Australia 1 and 2 cent coins are not legal tender, so when the price of an article is x.99c, I pay by card.

Regards JD.

you never see 1.003 gallons for $3.00

The practice of using $4.99 instead of $5.00 started with a man name Macy at Macy's Department store in NY City. At that time, a penny was a lot of money to a lot of people, so Macy got the idea of reducing the price by .01 so that people would want there change back. This forced the cashier to open the cash drawer, and the bell would go off.

Before Macy reduced his prices, it was common for his cashiers to collect the money and pocket the cash, no need to open the cash drawer, so Macy would never find out.

The reason for the 299.9 a gallon goes back to the days when gas pumps had tanks on top of them. When the customer drove in they didn't say, "Put in $5.00 please." At that time it was common to say, "Give me 3 gallons please." So, to measure the amount of gas dispensed, the attendant had to pump the gas into the tank above the pump, measure the amount, then put it into the customer's car. The measure was not very accurate, so was adjusted to .9 cents a gallon to account for the losses of the hoses and what not.

I love worthless facts.

This is not a worthless fact.

• You look intelligent at a gathering when someone asks "Why are the prices the way they are".
• You will be a sought after while making teams for Trivial Pursuit.
• May come in handy if you have to cross the Gorge of Eternal Peril.

"Is this supposed to make the consumer feel like they're paying less"

Yes it is! ...and I don't think anyone has mentioned yet that is always ends in 9 "thousandths" I just paid $2.959 for 87. If you happen to buy exactly 1 gallon of gas who keeps that extra $0.001? Could you write the station a check?

You save a whopping $0.01 for every 10 gallons!

It is basically a long standing tradition in the US (for the reason you mentioned,that it appears less costly/gallon). However, I dont think it is just a US thing, as I have seen the same pricing used in many other countries (throughout Canada, Africa, Central America,...).

The correct answer is taxes. Federal and state taxes on gasoline are set to the tenths of a cent on the gallon and this has always been used in the pricing of the gallon of gasoline. Thank the Gonverment

I find it incredibly difficult to believe that with as much as gas prices fluctuate, when taxed to the exact $0.001 it always ends in a 9... I mean, come on, most price signs for gas stations around here have the last "9" marked permanently on the sign, couldn't change it if they wanted to...

Just an aside, is area 51 the hiding place for government-alien relations, was there a second shooter on the grassy knoll and did the Bush administration plan 9/11 as an inside job too?

Cash registers "round" off fractions. Go to your local gas station, and try to purchase exactly 1 gallon of gas. If the listed price is $2.999, they will charge you $3.00. Buy exactly 5 gallons and you will pay $15.00, but you will feel like you paid less than the fool, buying gas, across the street, for a listed $3.00/gal

Hi Mevel123,

"Go to your local gas station, and try to purchase exactly 1 gallon of gas. If the listed price is $2.999, they will charge you $3.00"

I guess the problem with that scenario is that I don't have a 9/10's cent coin even if the merchant would accept it. Wonder if one counterfitted such a coin, would the Feds come after them?

-John

I don't have a 9/10's cent coin even if the merchant would accept it.

Technically you do not need the fraction of a penny- The responsibility should be on the merchant to make change for your extra penny, after all it is he that sets the awkward price. Perhaps he will give you 1 Tic-Tac or 1 jelly bean.

One point missed which does answer your original question. Way back when, when gas was cheap, gas prices were actually calculated in tenths of cents. Eventually, as prices rose, the tenth stuck at 9 and has remained there ever since. there was a time when 5/10ths or 3/10ths or any other 10/ths was actually used. DavidARheault

If the US and Canada users ever pay un-subsidised prices for their oil, diesel and petrol, then perhaps much less conspicuous consumption should result.

The true present price would be somewhere around US$26 (without the .999) per US Gallon, in the US.

It's just that the rest of the world's oil users are tired of subsidising the big US V8's and Humvees etc.

I do admit that in New Zealand, though Petroleum products are far more expensive to buy here, we still do not pay the true costs.

Perhaps in the future, I shall have to throw away the diesel engine in my Landcruiser, and put a pair of shafts out the front, for the horse to pull it along....

no price subsidy here in Canada. We have high state taxes on gasoline. Higher taxes would discourage use. In venezuela gas is 5 cents/litre, state subsidised. one day they will get a shock

Marks & Spencer [M&S], in particular, used to present all their prices in £[x-1].99 instead of £[x]. Of late the practice has ceased.

In the days when coin and banknote was the predominant method of payment, it was cheaper to unload all the shrapnel coins from the till by giving them back to customers in the form of a cheaper perceived price and better perceived value, than to incur the coust of counting, bagging, storing, hauling, banking, storing and redistributing them. Nowadays, with electronic methods of payment becoming very common, there simply isn't any business advantage in knocking off the 1p to give a £[x-1].99 price any more. In many stores today, M&S in particular, one won't find many fractions of a pound displayed on garment prices at all. Customers buy on quality and appearance, and price is a secondary consideration.

Fuel sales are extremely price-sensitive for some reason, and the fractions-of-a-penny incentives are everywhere. The low margins made by the retailer on fuel dictate that every customer won makes a difference, and the fraction of a penny display gives a competitive edge against the retailer down the road; it isn't the same as buying clothing. However, as it is treasonable to deface the coin of the Realm by cutting it to produce the penny fraction, most purchasers type their PIN in for a selling price that is shown to only two decimal places of a £ instead of three regardless.

There are rail travel deals available where a cheap-day-return ticket is priced lower than a single. So what do people do? They buy the return ticket and throw the return part away. Now that's absurd!