This is not about the PRICE per gallon of gasoline, but the practice of putting the 9/10 of a cent after the price. Everybody prices their gas at $X.XX 9/10 per gallon. Why don't some dealers price their gas at $X.XX 3/10, or $X.XX 6/10? Or better yet...NO tenths! Harold
@Hal Pollner That question has haunted me ever since 1972, when I took over Dealership of an ARCO station in Las Vegas. Got to go to beautiful (?) El Monte 4 weeks running for Dealer Training. My selling price was .37-9/10 regular, .42-9/10 ethyl; there was no unleaded. Took it over in July, around Thanksgiving ARCO sent me a letter that beginning Jan. 73, gasoline deliveries would be limited to 60% of same-month year-earlier deliveries. Thanks, Saudi Arabia! By March, I was outta there. Frank
I searched all over and have not found a definitive answer. Having stated that tidbit, I did learn the practice of "tenths" was a direct result of the federal government and various state governments adding taxes in tenths of a gallon. That made sense when gasoline was 11¢ or 15¢ per gallon. As to the why the 9/10, that appears to be marketing that originated in the 19th century and studied since. The power of the number 9. Research over the past 150 years, across many countries and currencies indicate ending a price with the number 9 is beneficial for sales. Numerous instances of prices being raised to end in 9... resulted in increased demand as does dropping down a penny to end in 9. I will try to remember this when next out and about and see how often the ending number is 9. Here is one of the articles I ran across ... The pricing power of 9.
@Harry Havens It is indeed very often "9", and even more often "99" as in ninety-nine cents. Especially on our grocery prices! Frank
@Harry Havens Why would you say your answer is not definite? It covers the main reason why a price ending in a nine has power. Marketers have indeed exploited the mechanics of the human brain or so at least they claim. Numerous tests have also shown that a price of, say, $49 may even seem cheaper to a customer psychologically than one of $45 since it indicates that a threshold price has seemingly not been reached yet. As for gas in particular, the 9/10 used to be a kind of tax, the tip for the gas station tenant. Nowadays the reason is chiefly psychological and economic as it is believed to give the company offering it an edge over the competition. Another reason for it is that you can't pay the 0.9 of a cent. So the price gets rounded down by 0.9 cent as a maximum if you don't end up on a round sum which means that for one in ten litres you'll pay the real price shown on the display board.
It is the manner in which the 9/10 is displayed and the frequency, which is almost, if not all stations across this country. If it were simply 2.689, rather than the above, the power of nine might seem stronger or even 2.69 being stronger. Even stations with digitized price boards have that 9 tenths as a small signboard rather than digital. As a result most Americans would state the price of gasoline at 2.68 or 2.64, etc. If it were... ... how many days or weeks would pass before anyone noticed? In the 80s, the state of Iowa outlawed the 9/10 symbol for only a few years. Why they passed the law is difficult to find on the web, as is why they rescinded the law.
A woman will tell her friends: "Oh, this dress? I got it at Lady Loveley's for $49.99!" Now why the hell couldn't she just say "Fifty Bucks"? Hal
Gas is under $2.00 here, for the first time in a long while, and prices south of Bangor are usually lower than here, so it might make more sense to stock up on gasoline than toilet paper.
Fox News is saying that prices could keep going down and actually be under a dollar later this year. Here is what I read about this. When our stock market was crashing, the Saudi’s dropped their oil prices way down, trying to crash the oil market and put us under because the price was lower than what America could sell oil for. Our businessman president, using the national emergency situation, bought up the oil at those crazy low prices, and we have oil stocked up in our tanks again, plus it saved the market from crashing. Good planning, Mr. President ! !
Lowered oil prices aren't good for the stock market and much of what is reported as a healthy economy is based on the current status of the stock market. I get that, but sometimes the very things that are bad for the stock market are good for consumers. Lowered oil prices are one of these. While the media decries the faltering stock market, consumers are able to buy gasoline and heating oil at a lower price.