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124 Comments
- inactive, on 10/12/2007, -19/+211A better question to ask is why is gas $2.19 and not $1.19.
- Alphateam, on 10/12/2007, -6/+78@cyre
"If you think of the 300,000,000 gallons of gasoline that is sold annually in this country, at $0.001 per gallon that comes to about $300,000 unreturned change per year"
That is a lot of scratch to steal.
It is like Office Space with the rounding of the penny.
Someone should be put in a Pound You In The Ass Prison. - CraigB12, on 10/12/2007, -9/+34I always thought it was because oil companies were money grubbing pieces of *****, and they wanted to squeze every last fracion of a cent from you. After all millions of .9 cents = a lot of money.
- joquarky, on 10/12/2007, -0/+20You could also buy exactly 6 gallons, which comes to $13.134 and rounds down to $13.13.
Then you get 0.4 cents worth of gas for free!
Fight the man! =P - fresh2, on 10/12/2007, -0/+19IT WAS IMPORTANT way back when gas was say 25 cents a gallon. One station would have gas for 25.2 cents and another at 25.7 cents. The extra place was important for the 'gas wars' of those days. When gas got close to a dollar a gallon, the extra tenths didn't really matter anymore and they just left it at .9 (of course)!
- inactive, on 10/12/2007, -7/+25you fail at digg
- nroose, on 10/12/2007, -2/+18It is just rounding error. Buy 10 gallons and you will be charged the correct amount.
And the 300 million gallons are not bought one at a time, so it will not happen for that. Some will get rounded down and some will get rounded up.
Same thing happens with sales tax.
It is a valid point that it is pointless to price something to the tenth of a cent. It is not valid to say they are stealing the tenth of a cent when you buy just one gallon. - meznak, on 10/12/2007, -1/+14@humperdeath
.009¢ or $.009 ? - Dhalgren, on 10/12/2007, -6/+17@jdb252
Superman 3, dude... - OverThere, on 10/12/2007, -1/+12Actually, I thought it was because of the federal excise tax on gasoline (and other taxes) being added into the pump price. They are typically things like 18.4 cents per gallon and such. for more info: http://www.artba.org/economics_research/reports/gas_tax_history.htm
- snurfle, on 10/12/2007, -5/+15My biggest gripe is that when prices rise or fall by some percent, it never seems to affect that pesky third decimal point!
e.g. if gas at $2.189 goes up 5%, then it should be $2.298, but it somehow seems to always get bumped to $2.299.
I also believe that when the tanker delivers the gas to the station, the price for that gas should remain fixed until the next delivery. - lexluthor5, on 10/12/2007, -1/+11This guy's article makes very little sense. His whole premise is flawed.
He says put in one gallon of gas at $2.189 and he's charged $2.19. Ok, score $.001 for the gas station. Put in 6 gallons of gas at $2.189 and you should be charged $13.134, but they'll only charge you $13.13 (I haven't confirmed this, but I'd very very surprised if that wasn't correct). This time score $.004 for you.
The tenth of a penny rounding to the nearest penny should pretty much even out over time.
Same thing with tax. Adding in tax doesn't make the item come out to an exact penny, so they round to the nearest penny. - McNamron, on 10/12/2007, -0/+9From http://www.mikedidonato.com/2006/07/11/defy-s-mcquaid-73-why-charge-a-mill/ (a blog I have no relationship with):
It’s an intriguing question, isn’t it? Why would anyone do this? And what else does this?
First, let’s answer the “why”.
It turns out, the reason that gas stations add tenths of a cent on to their price is purely marketing; nothing to do with taxes, nothing to do with esoteric gasoline laws - it’s simply a marketing ploy. Gas stations feel that customers are more likely to select them if they advertise their price as $2.899 than $2.90. And nothing prohibits them from doing so. Also, keep in mind that gas stations round UP the final price, so if your final pump price is $32.982, it’s really $32.99. (There may be exceptions to this rule, but I haven’t found them).
So, the “why” is pure marketing.
Interestingly enough, in 1786, a unit of currency was legislated into legality, equal to “1000th of a dollar” or “a tenth of a cent”, known as a “Mill”. However, this currency was never minted by the federal government. Some states and local townships did use the mill for some time to settle taxes on really cheap stuff, but the practice fell out of use fairly quickly.
The mill is still legal today, but you’d be hard-pressed to find it commonly used in sales anywhere other than gas stations. HOWEVER, many municipalities use the mill when calculating their property tax. Property tax can be expressed in terms of mills per dollar. For example, a millage rate for property taxes of 2.094 mills per dollar will cost the homeowner of a $200,000 dollar home 0.002094 * 200000 = $418.80. (The mill rate for my town is currently 9.93, assessed bi-annually).
So, there’s more than just gas that uses the mill, but not much more. Enjoy your mill knowledge! - armbar, on 10/12/2007, -5/+14Not really. Gas goes down and back up every 6 months, without fail. Summer and winter are the expensive times. Guess what happens right before winter? Elections, so it's just coincidence.
- omatsei, on 10/12/2007, -1/+8I buried this as inaccurate because the author only got 1 gallon, which would obviously be rounded up to $2.19 instead of $2.189. The receipt in the article specifically shows the gas price as $2.189, but then says "Fuel sale: $2.19". People on here are assuming that means they charged him $2.19 just because they're greedy, or it's some kind of conspiracy, rather than just seeing that they couldn't realistically charge him $2.189. For it to be accurate, he'd have to get exactly 10 gallons of gas, then look at his receipt. If he's charged $21.90, then they're screwing him. If he's charged $21.89, then they're not. Obviously, we don't have that information, so in my mind, it's selective editing, which equates to being inaccurate.
- brstilson, on 10/12/2007, -8/+15"It's the same reasoning behind selling something at $19.99 instead of $20.
It's less than $20, that's a deal!"
RTFA. The difference is that you're only charged $19.99. With gas you're still charged $2.19, not $2.189, you don't get that money back. It's just in a small enough portion that you don't care. - Iffrat, on 10/12/2007, -4/+11is it your first day here?
- Cyre, on 10/12/2007, -8/+14Diggin' this cause I've always wondered about that extra .9th of a cent. How did that ever start way back when?
- mattsidesinger, on 10/12/2007, -1/+7He never talks about whether they ever round down. For example, if he would have pumped 0.997 gallons at $2.189 then the total would have been $2.182433. If they round down, then that means that you paid for ~0.996 gallons of gas, but recieved 0.997. I think it work both ways.
- inactive, on 10/12/2007, -0/+5The article doesn't explain anything, it just raises a bunch of false speculation.
The prices are not set that way because the gas companies want to cheat you (well, they do, but this isn't how). The industry is an oligopoly anyway, they can charge us whatever the ***** they want and there is little to be done.
Googling around, and weeding through tinfoil hat data, this seems to be related to a federal excise tax, not an oil companies shady marketing ploy, dating back 70+ years. - Rhine23, on 10/12/2007, -0/+5The gas prices have stayed within in the same five cent range here in Minnesota Metro area. It between $2.10 and $2.20 with the median at %2.15.
- ItsFake, on 10/12/2007, -1/+6http://duggmirror.com/business_finance/Gasoline_Prices_Why_2_189_and_not_2_19_Why_The_Third_Decimal_Place/
- david76, on 10/12/2007, -6/+10@MiddleGirth
An even better question is why it's $2.19 and not $7.13/gal as it in Amsterdam (or was in August 2005). - RHollister, on 10/12/2007, -6/+10this article answers no questions besides further explaining the obvious.
useless - deacont23, on 10/12/2007, -0/+4Michael: "It's pretty brilliant. What it does is, every time there's a bank transaction where interest is competed, you know, thousands a day, the computer ends up with these fractions of a cent, which it usually rounds off. What this does is, it takes those little remainders and puts it into an account."
Peter: "This sounds familiar."
Michael: "Yeah, they did it in Superman III." - Slog, on 10/12/2007, -1/+5anicejew is getting dugg down because he didn't RTFA. Same goes for you, craive.
- taotehue, on 10/12/2007, -1/+5Gas Prices have gone up due to market conditions. The reason they are soo low in the U.S. is because of government subsidies. You may not realize it, but you pay for gasoline to be low at the pump from your income tax. The Oil Industry is one of the most subsidized industries in the world.
then you get taxed once more at the pump!
the subsidies is why it is hard for alt energy to compete. - armbar, on 10/12/2007, -0/+3"would have cost us an extra $600, compared to normal"
I guess you didn't see that sentence? When you're driving two vehicles--one that gets 6 mpg--across the country, it adds up pretty quickly. - TracerBulletNPI, on 10/12/2007, -2/+5I'm not sure where you live, but here in Central Ky, the prices haven't budged since the elections... Leading up to the elections gas varried between 2.10 to 2.30. Now, it's 2.18 (or 2.179...)
- mscbuck, on 10/12/2007, -14/+17People should really stop complaining about these so called "high" gas prices. You realize that it is a blessing from God that we aren't getting charged 10 dollars a gallon for it. There is a completely inelastic demand for gasoline. There no substitutes whatsoever. If I ran an oil company, I'd be doing the exact same thing. It's business, that's all. They can charge whatever the hell they want because as of right now, there are no substitutes (or real viable ones).
If I asked the average person what costs more, water, or gasoline, they'd probably say gasoline right? Go into your gas station and find out. Water is $1.29 for 18oz. If you wanted a gallon of water, you'd be paying $9.17 for a gallon of water, compared to $2.29 for a gallon of gas. Oil prices have actually been going DOWN (when adjusted for inflation) since 1930, and by a considerable amount. If you want to do something, create an alternative, it's as easy as that. If you want to blame anybody, blame the government for sometimes preventing those alternatives from being created.
Really, people should stop complaining to lower gas prices because we "deserve" it. I'd be charging even higher gas prices if I were in charge. But I suppose that makes me a bastard. - 5thfreedom, on 10/12/2007, -2/+5But at least if I buy a loaf of bread for $.99 and pay with a 1 dollar bill I will get a penny back. Gas stations just round up to the nearest cent. Marketing is one thing, stealing is another.
- omatsei, on 10/12/2007, -0/+3@beckerist: I'm not conceding any particular point, but he has the right to not read the article if he doesn't want to (or is incapable, like if the site's down), and he also has the right to make comments that other people disagree with. Neither of those rights is dependant, in any way, on his religion or ethnicity. Bringing those subjects up just makes you look like an ass. In other words, STOP BEING ANTI-SEMETIC.
- yasth, on 10/12/2007, -0/+3Then it would really suck if a gas station owner had expensive gas in his tank. I mean What if he has $3 gas when prevailing rate was $2.50, well it would be a long while before he sold that gas.
Gas prices go up and down. Also those tankers come a lot more often then you think. Some stations every day almost all every week. If you are bored sometime sit outside a gas station and count gallons. It is suprsining the sheer number they move through - carltonsmith, on 10/12/2007, -2/+5@nazdus - prices are based on demand. If there were a sudden shortage, the gasoline already at the gas station would become more valuable. Higher prices in such shortages helps distribution of the scarce resource. It discourages over consumption and assures that it goes to where it is needed most. Like I said, you might as well throw in the fact that you know nothing about economics.
- falstaff, on 10/12/2007, -0/+3It's only a "huge" issue if you buy your gas 1 gallon at a time. 1 X $1.899 will get rounded to $1.90, a "rip-off" of $0.001 per gallon. 15 x $1.899 gets rounded to $28.49, a "rip-off" of just $0.000333... per gallon. Even then, it relates to taxes far more than to Big Oil scheming.
- johnpaul191, on 10/12/2007, -0/+2some of that is regular annual fluctuations.
Labor Day weekend is considered the end of the summer driving season. kids going back to school bla bla bla. there is theoretically a time period that fuel prices drop a little (supply/demand) before the refineries start focusing their efforts on heating oil. i don't know too much about the oil refining operation, but they can switch their output product to what is in higher demand.
you can probably find a website with average yearly gasoline prices and if they use enough years for data there will be a pretty steady up and down based on time of year (and ignore oddities like katrina). - sven007, on 10/12/2007, -3/+5@dyslexicsUNTIED
Don't taxes fix that problem? i have never payed for something 19.99 and gotten a penny back, i always have to go up to 21.32 or something stupid like that. unless the sale tax didn't exist back then...
edit: ok, i forgot about grocery stores, my bad. what i said only works for taxed items. - Nougat, on 10/12/2007, -0/+2Besides being a flawed premise, he's used the most aggravating background on that page. The text is virtually unreadable. Can I bury this as "suck"?
- rnelsonee, on 10/12/2007, -0/+2Well, yeah, but the gas stations are still the ones putting the extra 9 on the end there - they're the ones setting the prices for the customer. They could just take that 9 off and still pay 41.9 cents or whatever per gallon. The gas station doesn't have to round for every gallon of gas - it's an aggregate. Gas stations go through thousands of gallons of gas per day, let alone in a month or a year, so the government could chage 41.00009 cents per gallon, and there still wouldn't be a need to round.
But your point is still there - the prices probably started ending in 9/10ths of a cent once the gov't tax rate ended in 9/10ths because they wanted/needed to pass that cost directly to the customer. - RandomEngy, on 10/12/2007, -0/+2The article is saying that people don't care about the specific STRUCTURE of gas prices (the tenths of a cent), not the gas prices themselves.
- armbar, on 10/12/2007, -0/+2@infamousjre: Sometimes you don't have a choice if you actually plan on drinking your water without boiling it first. We have a water cooler at home, since the tap tastes like the water gnomes have been peeing in it.
- nazadus, on 10/12/2007, -1/+3@carltonsmith:
I'll openly and happily admit I know nothing of economics (aside from a high school class). I wish you would do the same.
Price going up doesn't make sure it goes where it's needed or crap like that -- it still goes to who can afford it. Nothing more.
I'm also not going to sit and spend a couple hours for *every* *single* digg article that requires my brain so I can think of the most effective thing. This is why we live in a specialist society. People like me can go "wouldn't it be cool if..." without really having to consider the consequences, because me saying "dude, I like your idea, I wish they would implement it" isn't going to make them implement it. I can throw it out there, let others pick it apart.
I can also say I wish healthcare was free, like it is in Europe. Guess what? At the moment I don't even know if it's free in Europe OR the quality of it. But hey, I said it, that's what digg is all about man... no need to insult others. It's like an orgy. When you go to screw someone that isn't your type, just move along. Not that I've been in an orgy. =) - carltonsmith, on 10/12/2007, -0/+2@nazadus - "I can throw it out there and let others pick it apart." And then complain when they do apparently. I'm not going to bother explaining to you how fluctuation in prices helps distribute scarce resources to where they are most needed, "or crap like that", because it will obviously fall on deaf ears. You can throw whatever you want to out there, but I reserve my right to call ***** when I see it. Wouldn't it be nice if we all lived in fairy land and everything was free. The problem is that too many people are completely ignorant of economics and base opinions that result in idiotic politicians running things. So to allow the ignorance to be perpetuated without response, just because you have the right to spew it, would be counter productive.
- infamousjre, on 10/12/2007, -0/+2but why do ALL gas stations do it? I'm as likely to choose the $2.18 gas station over the $2.19 as I am to choose the $2.179 gas station over the $2.189 place.
- mr.hostility, on 10/12/2007, -0/+1*****, I haven't seen $2.19 in a few months.
- aakins, on 10/12/2007, -3/+4@sven007
Unfortunately some states DO charge tax on groceries!
It would be nice if there wasn't taxes on everything. Tax your income. Tax your spending. Tax your death, cause God forbid the government NOT get a part of your estate when you die. They just need to hurry up and move on to complete socialism, so we can start a revolution. - snurfle, on 10/12/2007, -0/+1I know a bit about commodity pricing, but nazadus is correct... it's just a bit of "wouldn't it be cool if..." discussion.
And to be honest, arguing about it is kinda like racing in the special olympics... even if you win, you're still retarded. - truck87bp, on 10/12/2007, -0/+1WHO CARES....DROP THE THIRD DIGIT. Thats are the original poster is really saying.
- wbeavis, on 10/12/2007, -0/+1According to my Verizon calculator, .9 cents is the same as .9 dollars.
- GiggleStick, on 10/12/2007, -0/+1Coral Cache Works
http://www.thetaoofmakingmoney.com.http.l2.l1.l0.nyucd.net:8080/2006/12/28/165.html
Incidentally, if that looks weird, that's because it's the version for people stuck behind crappy Microsoft DNS servers which have a bug in them. It will work for anybody though. Here's a story about that issue too, if anybody cares:
http://digg.com/software/Microsoft_DNS_Breaks_Coral_Cache_for_Many_People -
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