"Dear Yahoo!:
Why is gas priced to nine-tenths of a cent?
Nick L. Dimed
Dear Nick:
It does seem cruel. Everyone (well, almost everyone) buys gas no matter what it costs. So why do gas stations tease strung-out customers over a tenth of a cent? Is the industry run by evil hucksters? Perhaps, but that's not the reason for the unorthodox pricing.
Theories abound, but none are definitive. The Mail Tribune newspaper in Medford, Oregon, quotes Craig Randolph, an oil company's V.P. of retail operations. He says the nine-tenths of a cent is just a marketing gimmick that likely begun during the 1970 "gas wars." Over the years, it became the standard.
This site on Arizona gas prices offers a different theory. It argues that the precision of nine-tenths gives motorists a "false sense of accuracy" over their purchase. It goes on to state that this method of pricing "requires that almost all purchases be rounded to the nearest whole cent," which benefits oil companies.
Dr. James Madachy believes it's primarily a marketing thing ("It looks cheaper"), but acknowledges charging nine-tenths of a cent can be unfair to the consumer. According to Madachy, the state of Iowa "outlawed the practice for four years during the 1980s." However, the movement (if you can call it that) didn't have much success.
Gas stations are free to set prices however they see fit -- the nine-tenths isn't a tax regulated by the government. And as these photographs illustrate, they have the same practice north of the border, though the number after the decimal varies. "
http://ask.yahoo.com/20050915.html
I hope that clears it up for you!
Well, I know it was all over the place in the 50's, when I was growing up. A little more sense to it then, as 0.001 cents was more significant to 0.20 per gallon than it is now - but still it was absurd. I mean so absurd that I would become a loyal customer of a gas station that eliminated the .009 from their pricing scheme - just because!