All motorists are well aware that active price competition exists among the various service stations within a given area of the state. However, for at least the past 70 years, competition has been nonexistent when it comes to the 9/10 cent per gallon portion of the gasoline or diesel price, although fractional cents other than 9/10 are, and for many years have been, as easily programmable into the dispenser computer as changes in whole cents. Certainly, in the 21st century, the time has come to abandon the deceptive, anachronistic and collusive practice of 9/10 cent pricing of a gallon of gasoline or diesel fuel.
2006-06-19 11:57:37 · 6 answers · asked by Country Boy 5 in Cars & Transportation ➔ Other - Cars & Transportation
To get rid of the 9/10, we have to convince the federal and state governments to stop collecting taxes on fuel sales. That would lower the price per gallon by 25 to 40 cents, depending on the state. Don't see that happening anytime soon.
Also, if the 9/10 disappears, how do we know they didn't just round up? With the volatility of fuel prices these days, it would be next to impossible to tell.
The source below breaks down the federal and state fuel excise taxes.
2006-06-19 12:07:59 · answer #1 · answered by Raymond C 4 · 1⤊ 0⤋
This is mostly a bit of marketing cleverness - if you price something at 9/10 cent apparently some people round the number down rather than up and feel better about paying it. Historically, it may have been related to the combination of state and federal fuel tax in some states, but not now.
2006-06-19 12:06:39 · answer #2 · answered by Jimbo Ketan 2 · 0⤊ 0⤋
Our currency uses two digits for cents, but a gas pump can add more digits to bring it closer to the next cent value. Therefore making more money per gallon. Doesn't sound right, I know, I'll give an example.
2.99 is if it were calculated that way, would be just that, 2.990.
2.99 9/10 is 2.999 which is what a gas pump uses, and is a lot closer to 3.00 than 2.99.
Hope this helps.
2006-06-19 12:05:18 · answer #3 · answered by jay 7 · 0⤊ 0⤋
I think, unfortunately, my fellow Americans are all spoiled. The rest of the world pays much more for gas than we do, except for oil-rich countries. People are crying over $3.50 a gallon, but Europe has been dealing with much higher prices for a long time
2016-05-20 03:13:01 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Because the government tries to get as much money as it can. They think they need more money than they currently have. They spend trillions of dollars (mostly ours) a year on crap like paying women to stand naked in the street, covered in chocolate as art. And they still think they need more money. What idiots...
2006-06-19 12:04:31 · answer #5 · answered by hobo6 2 · 0⤊ 0⤋
This is a little ole' tax the government likes to put on gas as well as many other things...
2006-06-19 12:02:11 · answer #6 · answered by Pearl Prynne 2 · 0⤊ 0⤋