SAN RAMON, CA - Chevron Corporation, the nation's second largest energy company, announced today it will cut gas prices by 9/10 cents per gallon effective immediately. The move comes with the news of forecasts for record high crude oil prices over the summer. Savings to consumers could amount to as much as 19 cents per tankful, on average.
"We felt we needed to give something back to our customers." said Jeffrey Guilder, Director of Global Marketing for Chevron. "We will gladly absorb the cost on behalf of our shareholders."
The widespread practice of pricing gasoline to nine tenths of a cent dates back to the gas wars of the early 1970's, when prices averaged 25 cents per gallon. Some economists and marketing experts think that the practice may be outdated. "A tenth of a penny doesn't have that kind of buying power anymore." said J. Whelton Pipp, Professor of Economic History at Howyflyl University. "It probably costs that much just to cross the street to the competitor anyway."
Some lawmakers worry retailers may take advantage of the move and raise prices by one tenth of a cent in an effort to deceive motorists. "I am proposing emergency legislation requiring retailers to lower their prices by 9 tenths prior any further increases." said Rep. Henry Waxman, chairman of the House Oversight Committee. "Anyone trying to gouge the American people for another tenth of a penny will be dealt with severely."
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