Why do gas stations have a fraction of a cent added to every gallon?

Question

Why do gas stations have a fraction of a cent added to every gallon?

In: Economics

Answer 1

First Google result “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”

It’s the same reason that cars cost $19,999 instead of $20,000, or a Big Mac meal costs $9.29 instead of $9.30, etc. The perception of of seeing those earlier, more significant digits in the price being lower is that the overall price is actually meaningfully lower.