Thank you for a very interesting question.
(cached version VERY slow page)
General Gas Talk - Topic: Why 9/10 of a cent?
"Gas prices in the US always have an additional 9/10 of a cent tacked
on. What is the origin of this odd practice?"
(scroll to near bottom of page for post by Deno)
"As far as the origins, it goes way back to 1915. Until then gas was
sold in round cents. Twelve, 13, 14 cents, whatever. A Standard Oil
dealer in Cleveland was upset because the new kid in town, Esso, was
selling gasoline for the same price as he, but gave the customer a
gift with fill up. The Standard dealer couldn't afford gifts so he
tried the next best thing, money! As it turned out it was better! He
gave each motorist a penny off of every 5 gallons purchased. Within a
month Standard Oil sanctioned the practice company-wide and the
fraction was born. While Esso was selling gas for 14 cents per gallon,
Standard was selling it for 13 & 8/10 cents (or one penny off 5
gallons) all over Ohio. By 1916, pump manufactures had figured the
fraction into the mechanics of the pumps and it has been there ever
since. The motoring public, with the help of a creative dealer,
invented the fraction. As you pointed out, bod, the practice is highly
outdated, but do we really think of it as cheaper? Today they all give
us one penny off 10 gallons. When I see a sign that's 1.199, I see
(middle of page post by Deno)
"Believe it or not, I learned that info when I went to manager
training classes years ago for BP (ex-Sohio, ex-Standard of Ohio).
Their predecessor company was responsible for the fraction, so I guess
they felt obligated to share that info."
gas price 9/10 cent history origins