Nine-Tenths History?

California station owner drops traditional fractional pricing scheme

PALO ALTO, Calif. -- Jim Davis, owner of Jim's Texaco in Palo Alto, Calif., has dropped the nine-tenths of a cent from his posted gasoline prices, reported The Mercury News.

The last sign panel after each price was blank, on the order of Davis. Gasoline was selling for $2.99 a gallon, not $2.99 and nine-tenths, said the report.

Davis, the owner for more than 23 years, made the change a few months ago, according to the report, as prices began to soar and after years of listening to drivers gripe. He made the change as a larkan [image-nocss] expensive one for him. He figures dropping the fraction of a penny costs him around $23 a day if he sells 2,500 gallons of gasoline. That is $158 a week, $630 a month or about $8,200 a year.

There's been no reaction. None, Davis, who often would talk about dropping the extra nine-tenths loud enough so that customers would overhear him and perhaps say something, told the newspaper. No big comments, he said. None.

The archaic nine-tenths pricing structure may date to 1933, when the federal gasoline tax was increased from 1 cent per gallon to 1.5 cents per gallon. Stations began tacking the decimal point on those large signs, and drivers took notice, favoring a station selling gas for 11.9 cents over one selling gas for 12 cents a gallon.

I would think that any motorist who did notice that he removed the fraction would view that as a slap in the face, Steve Nolan of Cars.com told the paper. I can just see the motorist saying: `Gas prices are $3, and you think knocking off nine-tenths of a penny is going to be convenient?' How about knocking off 99 cents and nine-tenths?

Added Sean Comey of the AAA: Nine-tenths of a cent off? Down to only $2.99? What a deal! With a bargain like that, I can retire early.

But motorist Nick Briggs called the nine-tenths pricing an anachronism. He told The Mercury News, I'm happy to see it die a quiet death.

It is unlikely that will happen, said the paper.

Iowa banned the fractional pricing of motor fuel from 1985 to 1989. And as reported in mid-February in CSP Daily News, Minnesota State Senator Dick Day (R) proposed a bill to force stations in his state to get rid of fractional gasoline pricing. He said the measure would result in more truthful advertising.

About 70% of the 272 respondents to a Kraft/CSP Daily News Poll at the time said they would like to see fractional pricing eliminated; nearly 25% said no, however. The rest said maybe.

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