Fractional pricing dates back several decades, when it was a significant portion of the purchase price. One source says it dates to 1914, when gas was priced at 14.9 cents a gallon. Another source says that widespread fractional pricing came around in the 1930's, when the federal excise tax went from 1 cent per gallon to 1.5 cents, and that was immediately and directly passed onto the consumer. And once fractional pricing was implemented, they never looked back. Whatever the origin, it adds up to a large chunk of money (estimated $1.7 billion a year), which is more than enough incentive to keep doing it.
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Fractional pricing dates back several decades, when it was a significant portion of the purchase price. One source says it dates to 1914, when gas was priced at 14.9 cents a gallon. Another source says that widespread fractional pricing came around in the 1930's, when the federal excise tax went from 1 cent per gallon to 1.5 cents, and that was immediately and directly passed onto the consumer. And once fractional pricing was implemented, they never looked back. Whatever the origin, it adds up to a large chunk of money (estimated $1.7 billion a year), which is more than enough incentive to keep doing it.