Its Time. Get Rid of 1/10 Cent Gasoline Pricing!

@parados,

parados wrote:

How much per kWH for electricity? I bet you pay it in tenths of a cent or even thousands.

Do you use electricity in 1,000 kWH increments?
My electric bill lists electricity at .058070 per kWh.

That sounds about right. Another review of my bill shows a basis of 0.0533 per kWH, but then there are several adjustments to that as well, so the bill is about as clear as mud in terms of how much I end up paying per kWH. If I take out the customer charge simply to have an account and then divide the total by the usage, it actually comes out to about 10.8 cents per kWH. I think the extra is due to taxes and adjustments, including something called a "transmission charge.

So I will give you credit for coming up with an example of tenth cent pricing, parados, I will concede that you have a point in the case of electricity, and perhaps natural gas as well. However, I do think it is reasonable to expect the way it is done in those cases, with the commodity delivered in volume or quantity, via either pipeline or electrical cable through metering devices at peoples properties. However, I think the PUC's could do a better job of insuring the bills are clearer in terms of how the products are being charged, and why.

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@parados,

Parados and Walter, I believe the municipality rounds the meter reading to numbers of thousands of gallons. The reason I know this is because my usage went kind of high a few months ago and I became worried about a leak, so I began to monitor the meter myself, to see if it was moving at all when all water was shut off. Even though the meter was measuring more finely than in 1,000 gallon increments, the meter reader entered the readings in 1,000 gallon increments. For example, I found that the numbers were entered on the bill as 16 or 24, meaning 16,000 gallons or 24,000 gallons. in other words, one three month period I was billed for 24 units, or 24,000 gallons.

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@okie,

I really don't understand the concern here. The sign accurately shows the price. The pump accurately measures the volume delivered and computes the price to the nearest cent. Sure tenths of cents is just a marketing ploy, but there are all sorts of marketing ploys we allow all the time. This practice is not any more deceptive than charging $199.99 for an Ipod. For those saying there should be a law, why would we ask legislatures to waste their time raising the price of gasoline when they should be working on how to balance their budgets?

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@okie,

You avoided the natural gas and electricity question which are similar to gasoline.

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@parados,

parados wrote:

You avoided the natural gas and electricity question which are similar to gasoline.

No I did not avoid it. In fact, I conceded your point about electricity and natural gas. However, I still point out as I have already that natural gas and electricity are delivered via pipelines and cables, through metering devices at peoples properties, which are radically different than purchasing products at retail outlets. I think utilities are really a separate issue, which the public utility commissions become involved with from state to state, and I would not pretend to believe there are no problems with pricing structure in that realm either.

I go back to the gasoline pricing issue, and I just think it is time to do away with an antiquated practice that has outlived its usefulness. After all, should the public accept at some point in the future a price per gallon of ten dollars, 99 cents, and 9/10 cents per gallon?

I ask again, is there anything else in a retail outlet that is priced in tenths of a cent? I don't think so, and I think it would be an insult to the consumer if somebody tried it. Likewise, the price of gasoline increasingly becomes an insult to fair play and pricing ethics.

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@engineer,

engineer wrote:

I really don't understand the concern here. The sign accurately shows the price. The pump accurately measures the volume delivered and computes the price to the nearest cent. Sure tenths of cents is just a marketing ploy, but there are all sorts of marketing ploys we allow all the time. This practice is not any more deceptive than charging $199.99 for an Ipod.

At least the ipod seller has the decency to price the thing in an even cent, instead of a fraction of a cent, for which there is no financial denomination to pay for it that way.

Quote:

For those saying there should be a law, why would we ask legislatures to waste their time raising the price of gasoline when they should be working on how to balance their budgets?

I understand competely what you are saying, but there are many more stupid laws than this one would be. For example, if they can force us to buy fluorescent light bulbs, which when broken might require a hazmat team to dispose of, all in the name of saving energy, I would submit to you that there is a good chance my proposal might save as much or more energy in electrical costs for signage, plus there is no hazard in pricing gasoline in whole cents per gallon.

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@RABEL222,

That doesn't mean that you aren't more likely to buy something that is priced at .99. It is subconscious, so the only way to know is to have someone keep track of your habits without your knowledge.

Of course they are already doing just that.

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@okie,

No one is forcing those stations to price in fractions of a cent. They clearly figure it is worth it to price that way. If you don't support the government regulations on light bulbs, why would you support a law on this practice? Two wrongs don't make a right, right? I generally support merchants' rights to advertise as long as it is truthful and pricing gas to the tenth instead of whole cent is nothing compared to other advertising practices. I guess everyone has their pet peeve, but I just can't get very excited about this one. If it helps consider the price to be $3999 per thousand gallons.

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@okie,

My water meter measures it in increments of 100 gal..

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@RABEL222,

So, they could price in to the hundredth of a cent without losing that penny. Not bad.

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@engineer,

engineer wrote:

No one is forcing those stations to price in fractions of a cent. They clearly figure it is worth it to price that way.

Yes they figure it is worth it because they are profiting from their game of pshcology in pricing.

Quote:

If you don't support the government regulations on light bulbs, why would you support a law on this practice? .

Because it is the ethical and decent thing to do. This relates to honesty in pricing, which can be enforced by law. I have been in business and no way would I price a product to my customers as $1.95 and 9/10 of a cent. I go back to the question, what would be wrong with requiring a product be priced in the unit that it is being purchased, whether by gallon, by each, by the dozen, or whatever. I still have not had anyone offer another example of any product sold in a retail store that is priced in fractions of a cent, and so why should gasoline? By the way, this issue has far more justification to fix than forcing people to buy certain kinds of light bulbs.

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@okie,

okie wrote:

I go back to the question, what would be wrong with requiring a product be priced in the unit that it is being purchased, whether by gallon, by each, by the dozen, or whatever.

But you don't do it - you add local, county, state tax on it. Or don't you? (Here, I pay the price of a unit as it as labelled resp. announced. I might pay less, but never more.)

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@Walter Hinteler,

That is correct, tax is added to an invoice, which is entirely proper, because we can plainly see how much tax we are paying. That is another aspect of gasoline pricing. We do not see how much gasoline tax we are paying because it is hidden in the price. I think it is marked on the pumps, something like 40 some cents to 50 cents or so, depending upon state or locality. Most people are oblivious to how much the governments are raking in on gasoline, and I think the governments like it that way.

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@okie,

See, that's the point: when I look in a shop's window, see an advert etc - I really want to know what it costs. Not what the tax is (that's noted on the invoice, and as a private customer, they even mustn't do that for me).

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All items have imbedded taxes that you don't see.

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@okie,

okie wrote:

By the way, this issue has far more justification to fix than forcing people to buy certain kinds of light bulbs.

I don't see that from this thread. If a store offers you two for $1.99 (a common ploy in some stores to encourage you to buy two when you only need one), they are doing fractional costing, the same as if the gas station told you ten gallons for $39.99. The gas station also sells you gas in fractional amounts. Gas is not sold in gallons, it is sold in thousanths of gallons (maybe hundreths on some pumps), so the price is really $0.003999 / one one thousanth of a gallon. Multiplying 15.381 gallons by $3.999 and rounding to the nearest penny is not a lot different that multiplying 15.381 gallons by $3.99 or $4.00. I can't see how the later is more morally justified than the former.

There is some justification around saying incandescent bulbs waste significant amounts of energy and if we don't restrict our energy usage there will be negative consequences in the future, whether you subscribe to those justifications or not.

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If you've actually bought anything lately, okie, you know that there is a service charge, a convenience fee, a fulfillment fee, a cleaning fee, a room service fee, an obligatory gratuity, a key fee, a checked baggage fee, a carry-on baggage fee, a credit card fee, and a just-becasuse-we-want-to-gouge-a-little-more-out-of-you-fee that the company ypu're buying from charges you, none of which it tells you about when you ask the price, and that's before we even get to the taxes. Perhaps you ought to focus your attention on them, rather than the three cents a tank difference you'd pay if they raised the price to the next whole cent. Which is why I press for the cost all up, including taxes (a total a lot of companies waffle about giving you unless you push it). I want to know all it's going to cost me before I commit. The tenth of a cent just doesn't register on that scale.

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@okie,

okie wrote:

I go back to the question, what would be wrong with requiring a product be priced in the unit that it is being purchased, whether by gallon, by each, by the dozen, or whatever. I still have not had anyone offer another example of any product sold in a retail store that is priced in fractions of a cent, and so why should gasoline?

Hamburger meat. It is priced per pound, but sold per 1/100th of a pound. The last time I cooked burgers, I think the price was $2.99/lb for 1.64 lbs for a total price of $4.9036 conviently rounded to $4.90.

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@engineer,

engineer wrote:

okie wrote:
I go back to the question, what would be wrong with requiring a product be priced in the unit that it is being purchased, whether by gallon, by each, by the dozen, or whatever. I still have not had anyone offer another example of any product sold in a retail store that is priced in fractions of a cent, and so why should gasoline?
Hamburger meat. It is priced per pound, but sold per 1/100th of a pound. The last time I cooked burgers, I think the price was $2.99/lb for 1.64 lbs for a total price of $4.9036 conviently rounded to $4.90.

I said "[priced per pound," not the weight that you bought. So the hamburger meat was priced in an even cent per pound, $2.99 a pound. They do not price it at $2.99 and 9/10 of a cent per pound. I realize that if they sell by portions of a pound, that the total price may end up a fraction of a cent and it is rounded to the nearest cent. I am okay with that, as that is done all the time and is normal practice.

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@MontereyJack,

MontereyJack wrote:

If you've actually bought anything lately, okie, you know that there is a service charge, a convenience fee, a fulfillment fee, a cleaning fee, a room service fee, an obligatory gratuity, a key fee, a checked baggage fee, a carry-on baggage fee, a credit card fee, and a just-becasuse-we-want-to-gouge-a-little-more-out-of-you-fee that the company ypu're buying from charges you, none of which it tells you about when you ask the price, and that's before we even get to the taxes. Perhaps you ought to focus your attention on them, rather than the three cents a tank difference you'd pay if they raised the price to the next whole cent. Which is why I press for the cost all up, including taxes (a total a lot of companies waffle about giving you unless you push it). I want to know all it's going to cost me before I commit. The tenth of a cent just doesn't register on that scale.

You are ignoring the fact that if gasoline was priced in whole cents, it would probably create pressure upon the retailers to lower their price 9/10 cent instead of raising the price 1/10 of a cent. For example, 3.99 a gallon would probably fetch more customers to the pump than $4.00 per gallon across the street. The same principle would apply to $3.68 versus $3.69.

As far as fees are concerned, I am with you on that. I am for honesty up front, and that is part of my reasoning for changing he gas price to whole cents. Essentially 9/10 of a cent is roughly the same as a whole cent, and I believe honesty about it would be more ethical. As an aside, I realize stuff is priced at 95 cents or 99 cents instead of whole dollars, such as $3.95 or $4.99, but I can live with that because at least the price is in a whole penny, but when the price is a piece of a penny, I think they have taken it too far. I think we need to call a halt to the game they have gotten away with playing for far too long.

1 Reply

Its Time. Get Rid of 1/10 Cent Gasoline Pricing!

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