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The little differences

October 5th, 2011

I’ve filled up Sam’s tank about 50 times so far on this trip, so I’ve spent a good chunk of time at gas stations.  As a result, I’ve seen a lot of gas prices.  No matter what, gas prices in the United States always end in 9/10 of a cent on the price per gallon.  I have yet to hear a satisfying explanation for why that is the case.

Not so in Canada. I have noticed something during my recent time north of the border: prices per liter in Canada end in all sorts of tenth-of-cent values.

See how the price per liter ends in 7/10 of a cent? You'd never see a gasoline price end in anything other than 9/10 of a cent in the states. (Toronto, Ontario)

I don’t think it’s the different units of measure.  My best guess is that it has something to do with taxes.  Gasoline taxes in the US are all a fixed number of cents per gallon, but when HST is applied to gasoline in Canada, it is done on a percentage basis.  Since the prices are shown with taxes included, perhaps there is something about the way the taxes are calculated that makes it difficult to get the total price to end in 9/10.

All of this presumes that a price ending in $0.009 is desirable for the retailer, which, as mentioned earlier, is not a sure thing.

Google doesn’t seem to have an explanation, at least not with the searches I’ve tried  Somebody must.  What’s the answer?

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