Why Gas Prices Have an Extra 9/10 Cent

Gas station fuel types

Just in case you haven’t noticed, gas prices have an extra 9/10 cent added to the price. That fraction adds a whole cent to the actual price of gas, but why does it exist? Why don’t gas stations simply raise the price to the next whole cent? Good questions! Here’s why gas prices have an extra 9/10 cent from us here at Danny Len Buick GMC.

Simply put, it’s a marketing tactic that resulted from gas stations attempting to avoid a federal gas tax during the Great Depression. The human eye is drawn to larger numbers and tends to ignore smaller, seemingly insignificant numbers, like that 9/10 cent.

The practice originated in 1932 when the federal government attempted to implement a one cent gas tax. It was meant to be a temporary measure designed to help ease the pain of the Great Depression. Unfortunately, it didn’t expire in 1934 as planned. Instead, it was raised by a fraction of a cent.

While gas prices are constantly shifting by a few cents today, the 1930s were a different story. Adding a penny to a 15 cent gas price was a significant change. As a result, gas stations added 9/10 cent to the overall price. While the price of gas was really 16 cents, buyers continued to view it at 15 cents.

Today, the 9/10 of a cent adds up to more than $1.4 million for the industry.

Leave a Reply

Your email address will not be published.