Thursday, January 25, 2007

Wadda Ya Mean, Ya Sez Ya Can’t Sell Me $1.00 of Gasoline!

Ever tried to buy only ONE dollar of gasoline? You can’t do it! You can buy 99.9 cents worth, but never an even dollar's worth, or $2.00, or $3.00 for that matter.

Why is that? Several reasons. Foremost, we are quite befuddled by fractional math. Sure, 4 divided by 2 = 2, but exactly how many gallons of gasoline can you buy for $10 at $2.04 and 9/10ths a gallon? The addition of 9/10 cent to the price of a gallon of gasoline makes impossible the purchase of one gallon of gasoline at the advertised price. And it makes our mathematically challenged brains crash into a state of befuddlement. For some reason, consumers have just accepted the fact of fractional gas pricing. Imagine if all groceries, postage stamps and tuition were sold like that?

So why do you think we do it with gasoline? Well, some research says that a difference of two-tenths of a cent (about 30¢ for an average fill-up) may be enough to sway consumers' buying decisions. “Because of this, service stations quickly react to the price posted on the street corner by their competition and adjust their price accordingly. If not, they risk the possibility of losing their customers.”

Don’t lose a lot of sleep over this issue. What you ought to be worried about is why paying for a gallon of gas will likely always result in getting more or less than what you should. Did you know that gasoline volume changes approximately 0.058% for every 1ºF change in temperature. Hey, its just Boyles Law at work. “The energy content of a gallon of gasoline purchased by a motorist in Nome, Alaska in January could, theoretically, be as much as 8-10% greater that that of a gallon of gasoline purchased by a motorist in Marion, IL (center of the universe, I’m told) in July.” So 10 gallons in Alaska might be 11 gallons Illinois. But, they still have the identical energy content. You pay for 11, but really only get the value of 10.

Robbery you say? Fraud and conspiracy? Maybe. As this website describes, only a few places have adopted the readily available technology that automatically adjusts the price of gasoline as it exits the fuel pump nozzle: Canada and Hawaii. Iowa had the technology in place "from 1985 to 1989 before special interests reinstated the deceptive pricing practice. "

Is temperature compensated gasoline sales the ultimate answer to high prices. Of course not, but wouldn't be nice to end a system that is inherently confusing and misleading? Even most local communities could require the changes if the people wanted it.

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