Posted yesterday at 6:00 a.m.
Gasoline is almost $2.22 a litre. I say almost, because in fact it is $2,219. I think it’s time to get rid of the insignificant tenth of a cent. I would be very curious to know how specialists in the field can explain to us how pumps can manage to calculate a measurement that does not even represent a drop.
Luc Desjarlais, Saint-Amable
Gasoline is definitely not a product like any other. It is probably the only one to display a price per unit, per litre, whereas we buy dozens of them, with an accuracy of up to tenths of a cent and which includes all taxes. Its other specificity is that consumers are extremely sensitive to price differences between service stations, to a level that borders on irrationality.
For decades, when the price of a liter of gasoline was under the $1 mark and was displayed in cents, the price wars therefore went as far as tenths of a cent, explains Carol Montreuil, vice-president of the Canadian Fuels Association.
“Studies have shown that consumers change neighborhoods or go a block further for differences of half a cent. I don’t know many other areas of commerce that display their prices on the street on 15-foot high signs, that you shop with your car…”
“Superfluous” today
This precision to the tenth of a cent remained even when gasoline exceeded $1 in July 2005 in Montreal. “Petrol is expensive and will remain so,” warned July 14 on the front page of the Business section of The Press journalist Hélène Baril.
Today, at a price hovering around $2.20 per litre, “the third decimal becomes superfluous, agrees Carol Montreuil. But the panels allow it, so it stays in place. »
The consumer, he has not changed despite the price increases: he is very little loyal to a particular brand, he notes.
People will say, “I’m looking for the best price, it’s the same product anyway.” Yes, companies will tout their own additives, but in the end, all of them put in an additive that is good for the engine.
Carol Montreuil, Vice President of the Canadian Fuels Association
The only exception is gas stations with a pump attendant, which are becoming rarer and are generally associated with mechanical services. “People accept that the prices are a little higher, there is a clientele who appreciates that and who does not want to get out of their car to fill up. »
Reflection of world prices?
France is an interesting case for this famous third decimal, which only appeared with the adoption of the euro in 2002. The economist Erwan Gauthier published in 2015 a study which demonstrates the psychological and marketing aspect of this practice. After analyzing 8.5 million prices from 2007 to 2009, he found that 60% of them ended in a “0” or a “9”, which is obviously not random.
This exercise was justified by the fact that some analysts explained that this third decimal was actually the course of futures contracts for gasoline, and fuels in general. Indeed, these courses go up to the third, sometimes even up to the fourth decimal place. Gasoline, for example, was selling this Friday morning at US$4.1506 per gallon and crude oil, WTI, at US$119.390 per barrel.
“It has always been established like that and, even with higher prices, it continues, notes Carol Montreuil. I think it’s mostly tradition. »
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