Gas Prices...

ThomasP · Post by **ThomasP** » Fri Aug 25, 2006 7:29 pm

MADE YA LOOK!!!

Now for what I wanna ask, it has nothing to do with the gas price issues. This has been around for as long as I can remember.

Why do gas stations advertise their prices as $2.69 9/10 or $2.699? Did this start for any particular reason? I'm a fairly young guy, so I'm wondering if this started before I knew it. Or is this some marketing ply because 2.699 is SO much cheaper than 2.70?

Mark · Post by **Mark** » Fri Aug 25, 2006 7:45 pm

This is the result of your governemt in action. The fraction of a cent comes from taxes.

Chuck(G) · Post by **Chuck(G)** » Fri Aug 25, 2006 8:09 pm

Yes and no, Mark.

There's an old marketing study (probably from the 1930's) that says that folks tend to think that $1.99 is LOTS cheaper than $2.00.

That's why you almost never see a merchant pricing things at $1.07 if he can help it. $0.99 seems SO much cheaper. Cruise through the supermarket and see how many prices end in "9".

Basic psychology.

Mark · Post by **Mark** » Fri Aug 25, 2006 8:27 pm

Chuck(G) wrote:Yes and no, Mark.

The federal gasoline tax is, I believe, still 18.4 cents per gallon. Most, but not all, of the states have a gasoline tax that is levied in whole cents per gallon. This includes my state, Washington, at 31 cents and your state Oregon at 24 cents. Apparently Washington charges an extra 7 cents for priviledge of self service. (N.B. Oregon was the first state to tax gasoline.)

I'm also aware of marketing studies that suggest that $2.999 is perceived as cheaper that $3.00. I'm sure people fall for that. So, for 10 gallons of gas I could pay $29.99 instead of $30.00. Wow, I guess I can afford that steak dinner now.

Actually, I need to conduct a test next time I buy gas. How much do you think one gallon of gas at $2.999 per gallon will cost me?

Doug@GT · Post by **Doug@GT** » Fri Aug 25, 2006 8:56 pm

Mark wrote: Actually, I need to conduct a test next time I buy gas. How much do you think one gallon of gas at $2.999 per gallon will cost me?

In Georgia, it could cost you anywhere from 2.999 to about 3.05, because our current Dept. of Agriculture is so poorly managed that they don't enforce this sort of thing.

That's as close to politics as I'll get on this one.

d

SplatterTone · Post by **SplatterTone** » Fri Aug 25, 2006 9:16 pm

In the 1950s and 1960s (maybe still today), a lot of people thought
399
meant 39 cents for 9/10 gallon.

Carroll · Post by **Carroll** » Sat Aug 26, 2006 9:32 am

Chuck(G) wrote:folks tend to think that $1.99 is LOTS cheaper than $2.00.

Basic psychology.

I worked at a grocery store while in high school. We would regularly have soup priced at priced at .22 that would not move. When we ran a sale 4 for 1.00... we would sell out. Perceived bargain.

TubaRay · Post by **TubaRay** » Sat Aug 26, 2006 10:46 am

Carroll wrote: I worked at a grocery store while in high school. We would regularly have soup priced at priced at .22 that would not move. When we ran a sale 4 for 1.00... we would sell out. Perceived bargain.

There is a word for people who respond to this type of thing--idiots!!!

Chuck(G) · Post by **Chuck(G)** » Sat Aug 26, 2006 10:58 am

Carroll wrote:I worked at a grocery store while in high school. We would regularly have soup priced at priced at .22 that would not move. When we ran a sale 4 for 1.00... we would sell out. Perceived bargain.

I see this all the time at one of the chain supermarkets. The 10 for $10.00 sale. 10 green bell peppers for $10 seems to sell better than the competition pricing them at 79 cents each.

Same story goes for the percieved value in "house brands". Golly, if it's a house brand, it's got to be cheaper than the name brand, right? Wrong a lot of times.

The maddening thing to me is the quiet reduction of amounts while keeping the price the same or even slightly lowering it. For example, 14 ounces of pasta instead of a pound for the same price.

One thing I've discovered that's very strange is purchasing something with a label in Spanish from the ethnic foods section is often quite a bit cheaper. Knorr bullion for example. Same stuff, Spanish label, save 20%.

My wife likes to take me on supermarket junkets because I can do mental math pretty fast.

drow2buh · Post by **drow2buh** » Sat Aug 26, 2006 1:01 pm

Yeah, I worked at a liquor store all summer that is attached to a chain grocery store and some of our prices crack me up. We'll have 6-packs of beer on sale for $5.99 and people still buy the 12-packs for $13.99. Most people assume that larger quantity equals cheaper price, which is not always the case either.

We also have some 1.5 liter bottles of wine that are blatantly over twice as much as the 750 mL bottles of the same kind, and yet they buy the big bottles anyway.

The average customer is usually an idiot and terrible at math, so the people who own/design grocery stores take advantage of this kind of thing...

I actually had a person come through the liquor store (you can buy your groceries in there, too) who had a coupon from our stores ad that said "Any Hershey's Candy Bar, 9 cents with a $10 purchase." They didn't make the cut, they were only at 8 bucks. When I told them this, they said outloud to me, "Well, I really want that candy bar, so give me a pint," and spent 3 extra dollars to save approximately 41 cents.

dunelandmusic · Post by **dunelandmusic** » Sat Aug 26, 2006 3:00 pm

On a side note, I've always wondered when I go to the gas station, why aren't the taxes broken out separately? On all other purchases, your receipt will show how much each item is, and how much the tax is, but with gas, you get a receipt which says $20-gas. It should say $12.65 gas, $7.35 tax, or however it breaks out, so people could actually see what they are paying for.

Chuck(G) · Post by **Chuck(G)** » Sat Aug 26, 2006 3:15 pm

dunelandmusic wrote:On a side note, I've always wondered when I go to the gas station, why aren't the taxes broken out separately? On all other purchases, your receipt will show how much each item is, and how much the tax is, but with gas, you get a receipt which says $20-gas. It should say $12.65 gas, $7.35 tax, or however it breaks out, so people could actually see what they are paying for.

If that was done, folks might start deducting gas taxes on their income tax I believe that technically, it's okay to do so, but you have to have supporting documentation, so voilÃ¡! - "found" money for the gummint.

Mark · Post by **Mark** » Sat Aug 26, 2006 9:19 pm

Mark wrote:The federal gasoline tax is, I believe, still 18.4 cents per gallon.

Well, I had to buy gas on the way to a dog show this morning and I was actuall surprised to see the price for all three grades was $3.xx4 per gallon. I thought it would be $3.xx9.

bloke wrote:The lowest price for 87 octane that I've found locally is

$2.619

To those of you in Tennessee, please note that even our cheapest grade of gasoline is over $3 per gallon.

drow2buh · Post by **drow2buh** » Sun Aug 27, 2006 2:53 am

I live in IL and the cheapest gas in our area is over 3 dollars a gallon. However, I know there are other places in IL that are cheaper than 3 dollars a gallon. I also only live about 45 min away from IA, and gas is also under 3 dollars a gallon there.

On a side note, I've always wondered when I go to the gas station, why aren't the taxes broken out separately? On all other purchases, your receipt will show how much each item is, and how much the tax is, but with gas, you get a receipt which says $20-gas. It should say $12.65 gas, $7.35 tax, or however it breaks out, so people could actually see what they are paying for

Most of the time, when you pay for gas, the price says "tax included." They're catching you on a technicality so they don't have to do the math on taxes, and neither do you.

Brassdad · Post by **Brassdad** » Sun Aug 27, 2006 7:38 am

SpartanContra wrote:Here in NH, theres a line (of gas prices) separateing the North from the South. The southern counties of the state (which buy gas from Massachusetts that has ethanol in it) have prices that just recently dipped below $3 to the 2.8'2 and 2.7's. The Northern counties of the state (which buy gass from Maine that doesn't have ethanol in it) have prices like 10-20 cents cheaper. since this is done by county, in some places there are gas satations that are 100 feet from each other, but have a 20 cent difference in price!

Saw that on a recent trip to Pennsylvania. No Ethenol - over .20 cheaper per gallon - and my mileage went back up to 22 MPG instead of 17 MPG.

Yeah, that ethanol is great.

drow2buh · Post by **drow2buh** » Sun Aug 27, 2006 1:23 pm

That's weird, because where I live in IL, gas with ethanol is always the cheapest. I don't know if that is because we have so much corn around us or what. Seriously, though, you can get gas with ethanol that is 4 octane points higher and is still cheaper than the cheapest regular gas. God bless corn in IL!

I don't worry about gas mileage because my car is a piece and doesn't get good gas mileage anyhow. And, to top it off, my transmission just broke and doesn't shift into 5th gear anymore. Once I hit 4th gear I'm stuck, which means whenever I go over 55 I'm just draining the gas like a bathtub drain.

Chuck(G) · Post by **Chuck(G)** » Sun Aug 27, 2006 3:19 pm

drow2buh wrote:That's weird, because where I live in IL, gas with ethanol is always the cheapest. I don't know if that is because we have so much corn around us or what. Seriously, though, you can get gas with ethanol that is 4 octane points higher and is still cheaper than the cheapest regular gas. God bless corn in IL!

The problem with the usual 10% ethanol blend yeilds about a 2% loss in mileage. Add to that the heavy federal subsidies and "incentives" and I'm not so sure that ethanol is a good deal.

What might be better is butanol:

http://www.butanol.com/

But ADM and the big agribusiness gets bigger subsidies for ethanol.

CJ Krause · Post by **CJ Krause** » Sun Aug 27, 2006 4:35 pm

i paid 2.52 here in the Carrollton, TX area and it is up to 10% ethanol and i am sure it is more like E10

talk of going to E15 soon.

Kroger already has E85 at $2.24 yesterday. I dont know how many cars on the road right now can use E85.

i was reading and it says that Ethanol fuels develop more hp at all ratings on the gas

Chuck(G) · Post by **Chuck(G)** » Sun Aug 27, 2006 6:46 pm

More horsepower, but lower mileage. The simple reason behind this is that ethanol contains less available energy per unit volume. No getting around this. The increase in horsepower is simply because ethanol burns very hot.

The new E85-capable flex fuel engines typically show a loss of 10-15% in mileage when using E85.

If I lived in a cold-weather state, such as Minnesota, I'd really think twice about buying an E85-capable vehicle. Ethanol has terrible cold-starting characteristics.

Another gotcha is that ethanol as an affinity for water, which can create problems with corrosion.

Mercury Marine has issued a 5-page bulletin essentially saying that while ethanol may be fine in 4-cycle engines, it's a real problem for 2-cycle ones and recommends against it.

Just more grist for the mill.

Shockwave · Post by **Shockwave** » Thu Aug 31, 2006 3:51 am

Around here (southern CA), prices range from $2.989 to $3.299 for low test, sometimes that variation in price occuring across an intersection. The pumps say "may contain 10% Ethanol" and yet high test is only 91 octane. If gas prices get really bad I'll just convert my car to steam power and run it by burning junk mail.

-Eric