.9 on a gallon of gas

What’s with the .9 tacked on to a gallon of gas?
How did this get started?
It seems like a deceptive business practice to me. When we say $3.75 a gallon (the current price on a gallon of gas here in Santa Cruz), the price is really one mil (1/10 of a cent) less than $3.76. This doesn’t sound like much until you tally up the millions of gallons of gas being sold and then it adds up to a really tidy, hidden, profit for those greedy petroleum industry bastards.
I think we need a national protest to get rid of the .9.


I think most (all?) gas stations advertise their per-gallon price with a little “[sup]9[/sup]” after the down-to-the-penny price, e.g. the sign will say “$3.75[sup]9[/sup]”. If not the sign, then definitely the pump.

If they don’t have the “[sup]9[/sup]” on the sign or the pump, I suppose you might have a case for false advertising, if you care to pursue the case with your state’s deparment of commerce.

While not particularly common in retail sales, prices in fractional pennies is a common practice when dealing with wholesale or bulk business transactions.

The key here is “When we say $3.75”. Consumers’ shorthand of the price doesn’t equate to the gas station lying about the extra 0.9 cents. As Machine Elf notes, they legally must post the exact price at the pump (and, AFAICT, their exterior signs show the extra, too).

I’d like to know how the “.9” got started.
Has it always been this way since gas started being sold?
I don’t think any other business tacks on .9 mils to their posted prices. How come the petroleum industry gets away with it?
Maybe Cecil could calculate the total profit made by Exxon per year from this add-on that most people don’t even think of when they gas up their car.

People rarely buy 1 gallon of gas. So taking off $.001 to make the price seem a bit lower is no different than pricing something at $4.99 instead of 5.00. It is a little silly for gasoline these days because the price fluctuates so much and people are mostly doing a comparison to the price per gallon of their last fill up. I wonder if started in some gas price war. Someone put up a sign for .199 per gallon instead of $.20 per gallon to draw the customers. Surely started with prices lower than that if my childhood memory of gas prices is correct.


I actually believe that this is a function of state and Federal taxes(18.4 cents per gallon) and a little rounding up by retailers. Annoying yes, evil nah


Gas is super inelastic. Who’s going to stop buying gas because it’s really $3.47 instead of $3.46? It’s only in that circumstance, when someone would have bought at $3.46 but not $3.47, that you can argue that the gas station cheated them out of that extra penny. There’s also nothing that says gas must be at $3.46 and that 9/10 is a little bit of accounting trickery to squeeze another penny out. It’s just marketing like $4.99 instead of $5 as said above.

It doesn’t even affect people who fill to a dollar limit. If you have $20, you’re going to pump to $20, regardless of how much gas that actually gets you.

This article doesn’t shed much light on the “why”, but it does indicate that gas being priced with fractions of a cent been around for a long time (as far back as the 1920s or 1930s):

The story I’ve heard, and maybe this will help other people doing research, is that gas itself used to cost only 9 mils, and the rest was tax. Rounding it up to a cent would just make the price seem higher, and thus make it easy for a competitor who was willing not to round up.

People got so used to the extra $0.009 being there that it stuck around.

I may have the gas price and tax mixed up.

The Master explains.

I have a feeling the dealers would add a mil rather than drop nine.