THE 9/10 MYSTERY:
WHY FRACTIONS
AT THE PUMP?

A Century of Fractional Pricing

If you look at any gas station sign in the United States, you will see a small “9” sitting next to the price per gallon. This represents 9/10 of a cent. While it may seem like a modern annoyance, this practice actually dates back nearly a century. In the 1930s, when gas cost only 10 cents per gallon, a one-cent tax increase represented a massive 10% price jump. To make these taxes more palatable to a struggling public, the government and retailers began using fractions of a penny.

1. The Great Depression & Federal Taxes

The first federal gasoline tax was enacted as part of the Revenue Act of 1932. At the time, the tax was set at exactly one cent. However, because competition was so fierce during the Depression, station owners began shaving fractions of a cent off their base price to undercut the station across the street. By the 1950s, the 9/10 format became the industry standard, and it has remained largely unchanged even as prices have climbed toward 2026 levels.

2. The Power of “Left-Digit Bias”

Why do stations keep the fraction today when a penny is almost worthless? The answer lies in consumer psychology, specifically a phenomenon called “Left-Digit Bias.” Our brains tend to focus most heavily on the first numbers we see. Consequently, a sign that reads $3.79 and 9/10 feels significantly cheaper than one that reads $3.80, despite the difference being only one-tenth of a cent.

3. The Profit in the Pennies

While 9/10 of a cent sounds negligible, it adds up to staggering amounts across the industry. With hundreds of millions of gallons sold daily in the U.S., that fraction generates roughly $1.5 billion in annual revenue for retailers. Because profit margins on fuel are notoriously thin—often only a few cents per gallon—losing that 9/10 fraction could represent a 20% drop in a station’s total gasoline profit.