Comments on: Why Do Gas Prices Have Three Decimals?

By: Diane Henriksen

Diane Henriksen — Mon, 19 May 2008 23:36:02 +0000

I think it’s either a big waste of a decimal space ( how much money is spent on having that extra digit display?), or a function of the fact that the pumps aren’t all that accurate – can they really give us exactly 1 gallon no more no less? So it would seem that the more gas you pump, the more accurate the price is. But does it really matter? The price of gas is outrageous no matter how you figure it.

By: More Jack’s Business » Does that Extra $.009 You Pay for Gas Really Rip You Off?

Tue, 20 Nov 2007 12:00:44 +0000

[...] read more | digg story [...]

By: Brian Carr

Brian Carr — Fri, 19 Jan 2007 16:36:01 +0000

XessQ – Good idea, but I think your argument is off.

The gasoline companies don’t make profit based on what you “think” you’re going to pay. If I think I’m going to pay $5 for a tank of gas but it ultimately ends up costing $15, it’s not like the gas company gets $10 in profit.

By: XessQ

XessQ — Fri, 19 Jan 2007 16:28:45 +0000

“For example, when a gallon of gas is advertised at $2.359 we say, “gas is $2.35 today,” not “gas is $2.359 today.”

# GAL you think you pay
pumped $2.35 $2.359

1 gal 2.35 2.36
2 gal 4.70 4.72
3 gal 7.05 7.08
5 gal 11.75 11.80
10 gal 23.50 23.59
20 gal 47.00 47.18

so if your vehicle averages 23 MPG and in the course of the year you drive 18500 miles a year you consume 804.35 gallons of fuel and at the “2.35″ per gallon you think you would spend $1890.22 but you really are spending $1897.46 and thats how they make the money.

By: Brian Carr

Brian Carr — Wed, 10 Jan 2007 03:21:33 +0000

Not a problem – I enjoyed what you had to say and I think that you do prove a valid point.

When I put together my Excel spreadsheet I specifically used the round function (obviously to two decimal places) but that was under the assumption that gas stations do the same thing.

If they don’t, then it appears that the stations are getting between .001 and .009 extra cents for each gallon of gas.

You take that .009 and apply it to the 300,000,000 gallons of gasoline pumped in the US and you’re talking about getting ripped off of $2.7 million.

While that’s certainly not much in comparison to the tons of money these companies are raking in, I’d still take back my portion of it!

By: Golbguru

Golbguru — Wed, 10 Jan 2007 03:20:11 +0000

Thanks for mentioning my article and appreciate the efforts you took to verify a few things. People should always question whenever a theory is raised…helps to refine the topic

I quick note though, I know Excel rounds it off scientifically as in, 2.55 will be 2.6, and 2.54 will 2.5…etc., but I am not sure the gas stations do it that way. So the real check will be to fill in those incremental gallons of fuel (without anyone noticing that you are up to something ) and then check the numbers.

Also, I am ok with the rounding and stuff…and I don’t mind if someone rips me off for $0.001…my issue is just with the $0.001 display (no body else except gas stations do that)…I mean what kind of a currency unit is that.

You will be surprised to know that, after this article got on Digg.com…there were like 122 comments, and every one of them giving a different answer ..looks like no one knows what really happens.