You’re staring at the giant plastic sign or the bright LED board while idling at the pump. Regular unleaded is $3.45. But it isn't just $3.45. It’s $3.45 and nine-tenths of a cent.
It's weird.
We don't buy milk this way. You don’t go to the hardware store and see a hammer priced at $12.99 and nine-tenths. In almost every other corner of the American economy, we deal in whole cents. But for some reason, the fuel industry has clung to this bizarre fraction for nearly a century. If you’ve ever wondered why do gas prices have 9/10 tacked onto the end, you aren't alone. It feels like a glitch in the matrix or a subtle way to squeeze an extra penny out of every gallon. Honestly, it's a bit of both, mixed with a healthy dose of historical tax law and some old-school psychological trickery.
The Great Depression and the 1/10 Cent Tax
To understand this, we have to go back to 1932. The United States was in the middle of the Great Depression. The government was desperate for revenue to fund federal programs and infrastructure. As part of the Revenue Act of 1932, Congress enacted the first federal gas tax.
It was exactly $0.01 per gallon.
While a penny feels like nothing today, in 1932, it was a massive chunk of the price. Gas only cost about 10 to 15 cents a gallon back then. Adding a full cent was a significant percentage jump. To make the increase feel less painful to a public that was already broke, gas stations didn't always round up to the next whole cent. They started using fractions of a cent to stay competitive.
By the time the tax was increased to 1.5 cents in 1933, the precedent was set. Gas stations realized that if they could price their fuel at 10.9 cents instead of 11 cents, they could technically claim to be cheaper. It was a marketing gimmick born out of a tax hike.
Why gas prices have 9/10 and not 5/10
You might ask why it’s almost always a nine. Why not 3/10 or 7/10?
It’s all about the "Left-Digit Effect."
Retailers have known for a long time that consumers are fundamentally lazy—or at least, our brains are. When we see a price like $3.49 and 9/10, our brain registers the $3.49. We basically ignore the fraction at the end. It’s the same reason a shirt at the mall is $19.99 instead of $20.00. That one-cent difference makes the price feel like it belongs in the "teens" rather than the "twenties."
In the world of fuel, that 9/10 of a cent is the ultimate "just under" pricing strategy. It allows the station owner to collect nearly an extra penny on every single gallon sold without the consumer feeling like the price has actually hit that next whole number. If you multiply that by the millions of gallons a high-traffic station sells in a year, you’re looking at tens of thousands of dollars in "fractional" profit that would disappear if they rounded down.
Does anyone ever try to ditch the fraction?
A few rebels have tried.
Back in the mid-2000s, a station owner in Iowa named Jim Crawford made headlines for actually rounding his prices to the whole cent. He got tired of the "deceptive" 9/10. He wanted to be transparent.
What happened? He lost business.
Even though he was only charging a fraction of a penny more (or less) than his competitors, drivers saw his price on the sign and thought it looked higher. If the guy across the street is at $3.29 9/10 and you’re at $3.30, people go to the guy at $3.29. Our eyes stop scanning after the second decimal point. Crawford eventually gave up and went back to the 9/10 standard because, as it turns out, being honest about your pricing is a great way to go broke in the fuel industry.
The hidden math of your fill-up
Let’s look at the actual impact on your wallet. If you have a 15-gallon tank, that 9/10 of a cent adds roughly 13.5 cents to your total bill.
It’s not going to change your life.
But for the gas station, it’s a massive deal. The profit margins on fuel are notoriously thin. Most gas stations make very little money on the actual gas. They make their real money on the Monster Energy drinks, the stale hot dogs, and the bags of ice inside the convenience store. After paying for the crude oil, refining, transportation, and taxes, a station might only net a few cents per gallon. In that context, nearly a full cent of "bonus" revenue from the 9/10 fraction is a huge portion of their take-home pay.
Why don't we just get rid of it?
There have been occasional pushes to ban the practice. Some consumer advocacy groups argue it's confusing. But there is no federal law requiring or banning fractional pricing. It’s just "the way it’s done."
The IRS and state tax agencies also don't really care. They get their cut regardless. Since the 9/10 is baked into the price you see on the pump, the math at the end is simply rounded to the nearest whole cent for your final credit card charge.
Imagine the chaos if we suddenly switched. Every gas station in the country would have to reprogram their pumps and update their digital signs. And for what? To make the price look "cleaner"? Most owners aren't going to round down and lose money, so they’d round up. Consumers would see a jump in prices, and everyone would be mad. So, the 9/10 stays. It’s a relic of the 1930s that we just haven’t outgrown.
What you should actually watch for at the pump
While the 9/10 cent is a bit of a psychological trick, it isn't the biggest "hidden" cost you face at the gas station. If you want to actually save money, the fraction at the end of the price shouldn't be your focus.
Instead, look at the spread between cash and credit prices. Some stations, particularly on the East Coast and in major metros, charge 10 to 20 cents more per gallon if you use a card. That is a way bigger hit to your wallet than the 9/10 of a cent.
Also, pay attention to the "Top Tier" detergent gas standards. Brands like Costco, Shell, and Chevron meet these standards, which help keep your engine cleaner over time. Paying an extra few fractions of a cent for better additives might actually save you thousands in engine repairs down the road.
Practical steps for the savvy driver
Since we know the 9/10 isn't going anywhere, here is how you can actually handle gas station math like a pro:
1. Ignore the fraction entirely. When comparing prices on apps like GasBuddy or Google Maps, just look at the whole cents. If one station is $3.55 9/10 and another is $3.57 9/10, the gap is two cents, period. Don't let the extra digits clutter your decision-making.
2. Watch the rounding. Most pumps round to the nearest cent at the end of the transaction. If your total ends in .004, you’ll likely pay the lower cent. If it’s .006, it rounds up. You can't really control this, but it’s interesting to watch the meter when you’re bored.
✨ Don't miss: SoFi Student Checking Account Explained (Simply)
3. Factor in loyalty programs. A 5-cent-per-gallon discount through a grocery store or gas station app is worth more than five times the value of that annoying 9/10 fraction. Focus on the big wins.
4. Check for "zombie" pumps. Sometimes older pumps have displays that are slightly out of sync with the price sign. Always verify that the price per gallon on the pump screen matches the price on the big sign before you start squeezing the handle.
Ultimately, the 9/10 of a cent is a ghost of the Great Depression that we’ve collectively agreed to ignore. It's a reminder that retail pricing is as much about psychology as it is about math. Next time you see it, just remember: you're paying a tribute to a 1932 tax law that nobody bothered to change.
Keep your tires inflated, keep your trunk light, and don't sweat the fractions. The real savings are found in how you drive, not in the ninth-tenths of a cent at the end of the sign.