Why gasoline prices end with 9/10 of a cent

Because of a mix of history and psychology: the “9/10” traces back to 1930s fuel taxes and now persists as a just-below pricing convention that’s legal under weights-and-measures rules; it slightly lowers the displayed price while still being fully accounted for at the pump. In practice, it is not mandated by law, but it’s allowed, common in North America and parts of Europe, and totals are rounded to the nearest cent on your receipt.

Where the 9/10 came from

The fractional cent on gas prices emerged during the early 20th century, especially after the U.S. federal gasoline tax was introduced in 1932. With gas averaging well under 25 cents a gallon at the time, a one-cent tax was significant. Retailers began using fractional cents to remain price-competitive while passing along tax costs.

States layered on their own taxes—sometimes with fractional rates—and regulators permitted advertising and metering to tenths of a cent. Over time, 9/10 became the industry’s de facto “charm price,” akin to retail tags ending in .99. The practice spread to Canada and is also seen in countries like the U.K., where pump prices often end in .9 of a penny per liter.

Why it persists today

Several modern forces keep the 9/10 in place, even though pump prices are now measured in dollars rather than cents. The key reasons are both behavioral and operational.

• Psychological pricing: “$3.599” feels cheaper than $3.60 because buyers anchor on the leftmost digits. The effect is small but reliable in price-sensitive markets.
• Competitive signaling: When stations match each other by fractions of a cent, 9/10 provides a predictable “tick size” to advertise being a hair cheaper without a full-cent cut.
• Math that actually adds up: That 0.9¢ per gallon isn’t imaginary. Buy 12 gallons at $3.599 instead of $3.590 and you’ll pay about 11 cents more; the pump computes totals precisely and your receipt rounds to the nearest cent.
• Regulatory compatibility: Weights-and-measures rules (for example, the widely adopted NIST Handbook 44 in the U.S.) allow unit prices to include tenths of a cent so long as totals are computed accurately and shown in cents. Some states, like California, specify how fractional cents must be displayed on signs but do not require 9/10 specifically.
• Industry habit and signage systems: Price boards, POS software, and competitive routines are built around three decimals. Changing the convention would require broad, coordinated shifts with little payoff.

Put simply, 9/10 survives because it’s allowed, it’s embedded in hardware and marketing habits, and it still confers a small competitive edge without rewriting price points by full pennies.

Is it legal, and how is it calculated?

Yes. In the U.S. and Canada, pricing to tenths of a cent is legal so long as the pump’s metrology is accurate and the final amount a customer pays is correctly calculated and rounded to the nearest cent. Pumps measure volume in fine increments and multiply by the posted unit price, including the 0.9¢, so you’re charged exactly what’s advertised.

A quick example

If the posted price is $3.599 per gallon and you buy 10.000 gallons, the charge is $35.99. If you buy 12.347 gallons, the system multiplies 12.347 × 3.599 and rounds the total to the nearest cent on your receipt. The smallest U.S. coin is a penny, but pricing units can be fractional; the rounding occurs on the total you pay.

Myths and facts about 9/10 pricing

There are common misunderstandings about why 9/10 exists and whether it’s required. Here’s what holds up.

• “Stations are required to use 9/10.” False. It’s a convention, not a mandate. Laws typically allow tenths of a cent; they don’t require 0.9 specifically.
• “It’s meaningless.” Not entirely. The difference is 0.9¢ per gallon, which can add around 10–15 cents on a typical fill-up.
• “It’s a trick to hide taxes.” Partly historical. Early taxes helped normalize fractional pricing, but the enduring reason is psychological and competitive.
• “It would disappear if pennies disappeared.” Not necessarily. Canada eliminated its penny for cash change-making in 2013, yet fuel still commonly uses .9; cash totals are simply rounded at checkout.

In short, 9/10 isn’t a legal requirement, and it does have a small economic effect. Its staying power comes from market dynamics more than regulation.

How other countries handle the fraction

The 9/10 convention is strongest in North America and the U.K. Gasoline in Canada almost always ends in .9 cents per liter or gallon-equivalent, and British forecourts often display prices with .9 of a penny per liter. Across the European Union, three-decimal pricing per liter is common, though the last digit isn’t always 9; the broader principle—using fractions smaller than a cent or penny—remains widely accepted.

Could the 9/10 go away?

It could, but it’s unlikely soon. Digital signage and mobile payments make it technically easy to adopt round-cent pricing. However, as long as:

• regulations allow tenths of a cent,
• competitors use the convention, and
• retailers believe the left-digit effect preserves margin or traffic,

the 9/10 will likely persist. A coordinated industry shift, or a legal requirement to round posted prices to full cents, would be needed to dislodge it—and there’s little momentum for either.

Summary

Gas prices end in 9/10 because the practice began when fractional pricing helped retailers navigate early fuel taxes and tight competition, and it endures due to psychology, industry norms, and permissive weights-and-measures rules. It’s legal, the fraction is included in your pump total, and while it adds only about a dime to a typical fill-up, the convention remains a durable feature of the fuel market.

What year was gas $0.29 a gallon?

1954: Average retail price for regular gas: $0.29 per gallon.

Why do gas prices always end in 9-10?

Gas stations passed on the tax straight to the consumer by tacking it on to the price of fuel that day. The tax wasn’t always nine-tenths of a penny. Sometimes it was a smaller fraction. But by the 1950s, gas stations started rounding up to the 9/10 pricing, “squeezing the buck as far as they can,” Jacobsen told CNN.

Who actually controls gas prices?

Gas prices are not controlled by any single person, company, or government but are primarily set by the global market forces of supply and demand, which are influenced by crude oil costs, refining expenses, taxes, distribution, and marketing. While factors like government regulations and geopolitical events can impact the market, the ultimate price at the pump results from the complex interaction of these elements and the decisions of thousands of independent suppliers. 
Factors influencing gas prices:

• Crude Oil Prices: Opens in new tabThe cost of crude oil is the largest component of a gasoline’s price, with the global market for oil, including major players like OPEC, having a significant impact. 
• Refining Costs and Profits: Opens in new tabThe process of turning crude oil into gasoline adds costs, including manufacturing and profit for refiners. 
• Distribution and Marketing Costs: Opens in new tabThe expenses associated with transporting gasoline from refineries to retailers, marketing, and storing the product, along with associated profits, also contribute to the final price. 
• Taxes: Opens in new tabFederal, state, and local taxes on gasoline add to the cost consumers pay. 
• Market Supply and Demand: Opens in new tabLike any commodity, the price of gasoline fluctuates based on the balance between its availability (supply) and consumer need (demand). 
• Other Influences: Opens in new tabGeopolitical events, weather patterns, and even seasonal demand for different fuel blends can affect supply and demand, thereby impacting prices. 

Who doesn’t control gas prices:

• No Central Authority: There is no specific body or central authority that dictates daily gasoline prices. 
• Presidential Control: U.S. presidents have very limited control over gas prices, as they are largely determined by market forces rather than political decisions. 

What does the 9/10 stand for on gas prices?

So what’s the deal? The practice of tacking 9/10 of a cent on the end of a gas price goes back to when gas cost only pennies per gallon and was a tax imposed by state and federal governments. Gas stations added the fraction of a cent on the end of the price instead of rounding up the price.