fuel - the fractional pricing scam

[tonym911]

For reasons best known to myself I've just been reading Autocar's road test of the 1972 Jaguar XJ12, a fine machine if a rather thirsty one. 'The capacity of the fuel tanks has been reduced to 20 gallons,' noted Autocar. 'At our test average of 11.4mpg, refuelling stops come up depressingly often at intervals of little more than 200 miles, and at some £6-£7 a time.'

Now, moving on from a glorious time (not all that long ago) when petrol was 30p a gallon (less than 7p per litre) I am minded to wonder why fuel is still the only item you can 'purchase' for fractions of a penny. I use speech marks there because of course you cannot spend a fraction of a penny. You cannot go into a garage, buy say five litres at 129.9p a litre and demand half a pee back from your £6.50. They would laugh at you. And yet their pricing structure is there, offering fuel at prices ending in .9p – a total nonsense.

This may seem frivolous but when you add all these 0.1ps up over the amount of fuel sold in the UK over a year (as of course they always round it up) it seems to me that someone somewhere is making an awful lot of free money on the back of psychological pricing. This happens in the US also. Not sure about other countries.

The fact is that fuel is advertised at a certain price but then sold at another (higher) price. How, on the simplest contractual basis, is this allowed to happen? How can it be legal?

There was a movie a while back, a true story about an inputter working for some big US insurance company (I think) in the early days of card-index computing. He diverted 1 cent into his bank account from each of the many thousands of high-value transactions he processed. He made a lot of money before he was eventually caught, arrested and sentenced. I know it's not the same, but I don't see how what's going on with fuel is any less illegal.

[ralphrj]

tonym911 said:

There was a movie a while back, a true story about an inputter working for some big US insurance company (I think) in the early days of card-index computing. He diverted 1 cent into his bank account from each of the many thousands of high-value transactions he processed. He made a lot of money before he was eventually caught, arrested and sentenced.

No, no, no. Superman saved him and even gave him a job reference at the coal mine.

http://en.wikipedia.org/wiki/Superman_III

True story...

[VeeFour]

ralphrj said:

No, no, no. Superman saved him and even gave him a job reference at the coal mine.

http://en.wikipedia.org/wiki/Superman_III

True story...

Wasn't it Office Space? - and they got away with it when the stapler guy burned the office down.

[VeeFour]

tonym911 said:

Now, moving on from a glorious time (not all that long ago) when petrol was 30p a gallon (less than 7p per litre) I am minded to wonder why fuel is still the only item you can 'purchase' for fractions of a penny. I use speech marks there because of course you cannot spend a fraction of a penny. You cannot go into a garage, buy say five litres at 129.9p a litre and demand half a pee back from your £6.50. They would laugh at you. And yet their pricing structure is there, offering fuel at prices ending in .9p – a total nonsense.

The pumps only dispense in full pennies, so you'll (almost) always be buying fractions of a litre.

It's not rocket science!

[tonym911]

VeeFour said:

tonym911 said:

Now, moving on from a glorious time (not all that long ago) when petrol was 30p a gallon (less than 7p per litre) I am minded to wonder why fuel is still the only item you can 'purchase' for fractions of a penny. I use speech marks there because of course you cannot spend a fraction of a penny. You cannot go into a garage, buy say five litres at 129.9p a litre and demand half a pee back from your £6.50. They would laugh at you. And yet their pricing structure is there, offering fuel at prices ending in .9p – a total nonsense.

The pumps only dispense in full pennies, so you'll (almost) always be buying fractions of a litre.

It's not rocket science!

But if they only dispense in full pennies, why price it in fractions of a penny?

[Alan Kee]

because it's pence per litre, not litre (fractions thereof) per penny.

[mnkiboy]

Am I right in thinking that although the fuel price is displayed as £1.24, we are actually paying £1.249?

I was trying to work out my MPG the other day, and couldn't quite get the sums to add up, and I think this is the reason why.

[AndyLB]

I get around this by visiting the petrol station when the temperature is cold. That way the petrol compresses in a ration of 5:1 and it only costs me one fifth of the price to fill up.

[RB5]

I see your point, but most people don't go to a petrol station to buy 1 litre. For example, buy 10 litres at 126.9 and it'll cost you £12.69 - no missing fractions of a penny!

[Evangelion]

Yes but how many people buy their petrol in an exact number of litres? I don't, I always buy £10/£20/£30/£40 or whatever-worth, or once in a while fill it to the brim.

[tonym911]

RB5 said:

I see your point, but most people don't go to a petrol station to buy 1 litre. For example, buy 10 litres at 126.9 and it'll cost you £12.69 - no missing fractions of a penny!

So you're only losing money if you don't buy it in multiples of 10 litres. That's a bit inconvenient. I know this topic may seem a bit lightweight and/or frivolous but surely we should be asking ourselves why this fractional thing is going on. If there's nothing to it, then why does it go on? Why not just have full pence? Doing away with the fractions will save the oil companies money on their display boards as they can be one figure and a full stop narrower and therefore simpler/cheaper.

[DrTre]

mnkiboy said:

Am I right in thinking that although the fuel price is displayed as £1.24, we are actually paying £1.249?

I was trying to work out my MPG the other day, and couldn't quite get the sums to add up, and I think this is the reason why.

Unless you were filling a completely dry tank then any difference of 0.9p per l would be entirely negated by inaccuracies in knowing the volume of fuel used I'd have thought.

But, no, you're not pay 1.249, you're paying 1.24

[VeeFour]

tonym911 said:

So you're only losing money if you don't buy it in multiples of 10 litres. That's a bit inconvenient. I know this topic may seem a bit lightweight and/or frivolous but surely we should be asking ourselves why this fractional thing is going on. If there's nothing to it, then why does it go on? Why not just have full pence? Doing away with the fractions will save the oil companies money on their display boards as they can be one figure and a full stop narrower and therefore simpler/cheaper.

You can't buy exactly 1 litre, 2 litre etc. You only buy full litres when you buy in multiples of 10.

Why do you find this so hard to understand?

[tonym911]

DrTre said:

mnkiboy said:

Am I right in thinking that although the fuel price is displayed as £1.24, we are actually paying £1.249?

I was trying to work out my MPG the other day, and couldn't quite get the sums to add up, and I think this is the reason why.

Unless you were filling a completely dry tank then any difference of 0.9p per l would be entirely negated by inaccuracies in knowing the volume of fuel used I'd have thought.

But, no, you're not pay 1.249, you're paying 1.24

Are you sure about that?

[Kong]

VeeFour said:

tonym911 said:

So you're only losing money if you don't buy it in multiples of 10 litres. That's a bit inconvenient. I know this topic may seem a bit lightweight and/or frivolous but surely we should be asking ourselves why this fractional thing is going on. If there's nothing to it, then why does it go on? Why not just have full pence? Doing away with the fractions will save the oil companies money on their display boards as they can be one figure and a full stop narrower and therefore simpler/cheaper.

You can't buy exactly 1 litre, 2 litre etc. You only buy full litres when you buy in multiples of 10.

Why do you find this so hard to understand?

[VeeFour]

Kong said:

VeeFour said:

tonym911 said:

So you're only losing money if you don't buy it in multiples of 10 litres. That's a bit inconvenient. I know this topic may seem a bit lightweight and/or frivolous but surely we should be asking ourselves why this fractional thing is going on. If there's nothing to it, then why does it go on? Why not just have full pence? Doing away with the fractions will save the oil companies money on their display boards as they can be one figure and a full stop narrower and therefore simpler/cheaper.

You can't buy exactly 1 litre, 2 litre etc. You only buy full litres when you buy in multiples of 10.

Why do you find this so hard to understand?

The pump dispenses fuel in monetary terms, so you'll always be charged to the full penny, even if this means it's fractions of a litre.

Why is this so hard to understand?

[DrTre]

tonym911 said:

Are you sure about that?

Sure about what? The inaccuracy of filling and then trying to resolve the fuel consumption to the nearest penny per litre? Yeah, I'm confident that's futile based on just filling at the petrol station (and certainly if comparing with a car computer)

Regarding price, again I'm fairly confident that if I put £1.24 in I'd not be putting 1L in, I'd be putting in a pro rata of the volume being dispensed at £1.249 ie. ~0.993L

Just because something is displayed at a price per unit volume doesn't mean it can only ever be sold in multiples of that whole unit; what makes you think otherwise?!

Look up Price Marking Order 2004, this pricing mechanism isn't limited to fuel.

[Kong]

VeeFour said:

Kong said:

VeeFour said:

tonym911 said:

So you're only losing money if you don't buy it in multiples of 10 litres. That's a bit inconvenient. I know this topic may seem a bit lightweight and/or frivolous but surely we should be asking ourselves why this fractional thing is going on. If there's nothing to it, then why does it go on? Why not just have full pence? Doing away with the fractions will save the oil companies money on their display boards as they can be one figure and a full stop narrower and therefore simpler/cheaper.

You can't buy exactly 1 litre, 2 litre etc. You only buy full litres when you buy in multiples of 10.

Why do you find this so hard to understand?

The pump dispenses fuel in monetary terms, so you'll always be charged to the full penny, even if this means it's fractions of a litre.

Why is this so hard to understand?

I think you will find that i can buy exact litres other than in multiples of 10.

I know what you are saying though. £ per litre rather then litre per £ means the pricing is still technically legal.

[VeeFour]

Kong said:

I think you will find that i can buy exact litres other than in multiples of 10.

I know what you are saying though. £ per litre rather then litre per £ means the pricing is still technically legal.

[Fossilface]

Am I the only one who, when next filling up, is going to stop the pump at 1 litre and see what the money counter says?