Why Is Costco Gas So Cheap?

Costco doesn’t just help you save at home, but on the road as well. From automotive services at discounted rates to cheaper gas, Costco is helping everyone thrive by making products that much more affordable. 

But why is Costco gas so cheap? What are their tactics in keeping the prices low, along with the rest of Costco’s warehouse? Here’s a breakdown of the cost at Costco gas stations and their ways of keeping prices low for consumers.  

Subscribe to our newsletter for more exclusive Coscto97 content.

Why Is Costco Gas So Cheap?

If you’re wondering why is Costco gas so cheap, then look to the members. While there are many ways that Costco keeps products affordable, the main reason is that Costco customers are loyal.

The membership fees each year help the company create lower-than-average prices on good and services. And since you have to be a member to use Costco’s gas station, most want to utilize their membership as much as possible. Costco banks on the fact that their members will exclusively purchase Costco gas to make up for their yearly membership fee. 

And of course, the warehouse is another factor. When Costco members stop to fill up their tanks, they’re more than likely also planning on grabbing groceries. So the money that Costco makes on one single trip to grab fuel and food helps balance the money they might have lost from making their fuel so cheap. 

Do You Have to Be a Costco Member to Get Costco Gas?

In order to use Costco’s gas stations and save money, you have to be a Costco member. Because loyal Costco members help shrink the price of gas, only members can utilize those savings. The membership itself is one of the many ways that Costco can keep their fuel, and other services, as affordable as possible. 

Related: Does Costco Install Car Batteries?

Is Costco Gas Actually Cheaper? 

With the exception of other warehouse clubs like Sam’s Club, Costco tends to have cheaper prices at their gas stations than any other. While the price point differs between various locations, Costco has been one of the leaders in affordable gas prices.  

According to GasBuddy, Costco’s location in Connecticut is $3.19, which is around $0.20 less than other gas stations like CITGO. The Eugene location in Oregon shows Costco’s gas at $3.69, a substantial savings compared to $4.28 at Chevron. Another example is Hendersonville, Tennessee, with Costco priced at $2.68, around $0.40 less than popular chains like Shell or Kroger. 

Is a Costco Membership Worth it for Gas? 

Now that we know why Costco gas is so cheap, is it worth getting a Costco membership just for the fuel? It definitely could be, especially for those who travel more than average for work or leisure. 

But let’s break down the amount you have to drive a year to earn back the cost of membership — which is $60 for the basic type. If your car has an average of 30 miles per gallon, and with Costco averaging about $0.20 cheaper than other stations, then you’ll have to use at least 300 gallons to make up that $60 difference. That means you’ll need to drive about 9,000 miles. 

Read More: Costco Tire Sale: Perks of Buying Tires at Costco