gcarter
07-29-2009, 09:25 PM
The extra "tenths" is a very old tradition that's never gone away. In 1935, a Reno Nevada newspaper wrote about "selling third grade gasoline at eight and nine-tenths cents a gallon."
In those times, a penny had considerable value. To raise the price of gasoline from 8 to 9 cents would be more than a 12 percent hike. That's severe. Instead, gas stations raised prices by tenths of a penny.
The tradition stuck. And it's paying off for the gas companies. According to WiseGeek.com, "the U.S. Energy Information Administration, 'prime suppliers' of 'motor gasoline' reported sales of 372,833.5 thousand barrels sold in February 2007. Each barrel represents 42 gallons, and to determine the value of 9/10 of a cent for each gallon, we did the following calculation: 372,834 x 1000 x 42 x .009 = $140,931,063."
In other words, WiseGeek.com calculated that in February 2007, gas companies collected an extra $141 million in nine-tenths-of-a-cent increments.
In those times, a penny had considerable value. To raise the price of gasoline from 8 to 9 cents would be more than a 12 percent hike. That's severe. Instead, gas stations raised prices by tenths of a penny.
The tradition stuck. And it's paying off for the gas companies. According to WiseGeek.com, "the U.S. Energy Information Administration, 'prime suppliers' of 'motor gasoline' reported sales of 372,833.5 thousand barrels sold in February 2007. Each barrel represents 42 gallons, and to determine the value of 9/10 of a cent for each gallon, we did the following calculation: 372,834 x 1000 x 42 x .009 = $140,931,063."
In other words, WiseGeek.com calculated that in February 2007, gas companies collected an extra $141 million in nine-tenths-of-a-cent increments.