Why a Costco Membership Is Worth It for the Gas Prices Alone

February 27, 2024. By Dawn Allcot 

Citrus Heights, California, USA - Jun 28, 2013: Vehicles waiting in multiple lines for the gasoline at Costco, members only, gas station.

slobo / Getty Images

The national average gas price has steadily risen over the last year and currently comes in around $3.25. As some of the highest recorded gasoline prices have been seen throughout 2023, experts fear relief is not on the horizon. With that in mind, it is important to know where you can find cheap gas.

“It’s a dire situation and won’t improve any time soon,” GasBuddy’s head of petroleum analysis, Patrick De Haan, told NBC News in Chicago. “We’ve never been in this situation before, with this level of uncertainty… Americans will be feeling the pain of the rise in prices for quite some time.”

Why Are Costco Gas Prices So Cheap?

To put it simply, Costco gas prices are so cheap because the company typically sells its gas at a loss in its profit margin. Unlike other retailers, Costco doesn’t try to make money at the gas pump, but rather through its membership fees.  

Costco Gas Prices vs. Competitors

Gas prices vary wildly across the country right now, though, so let’s compare fuel prices on GasBuddy.com from the last year and see how much Costco members might save. Keep in mind these are just examples and all gas prices fluctuate from day to day.

  • For example, in Bakersfield, California, gas prices ranged from $4.99 per gallon at Costco competitor Sam’s Club, up to $5.39 at 7-11 last year. Gas at Costco was among the cheapest options at $5.09 per gallon.
  • That would be a savings of 30 cents per gallon at Costco compared to 7-11, or $4.20 per 14-gallon tank. You’d save an average of $218.40 per year buying gas at Costco, which more than pays for your membership.
  • In Patchogue, New York, the highest gas price is $4.79 at BP. Gas at Costco, however, is just $4.29, a hefty savings of 50 cents a gallon. Filling up at Costco would cost $60.06, while going to a pricier station could cost $67.06. That’s a difference of $364 annually — again, more than enough to justify the $60 membership fee.
  • In Colorado Springs, Colorado, a city where gas prices aren’t quite as high. Costco appears to had some of the cheapest gas in the city, at just $3.65 per gallon. You’ll find some of the highest prices in the region at Kum & Go, Loaf & Jug, and Conoco, where they were charging up to $3.89 per gallon for regular unleaded.
  • That means it would cost $51.10 to fill up at Costco versus $54.46 at one of these other locations. That’s a savings of just $3.36, or $174.72 for the year.

Is Costco the Cheapest Place To Buy Gas?

It’s pretty clear that you can save substantial amounts of money by purchasing gas at your local Costco, even once you factor in the membership fees. Of course, if you don’t pass a Costco along your normal daily driving routes — or need to go out of your way to fill up at the wholesale club — it may not be worthwhile. Here are some key takeaways:

  • Costco members will realize savings when they fill up at the warehouse club any day of the week.
  • If you’re not currently a Costco member, the annual membership for a Gold Star membership is $60 or $120 for an Executive membership, which delivers 2% rewards (up to $1,000) on most purchases.
  • The Executive membership doesn’t offer rewards on fuel purchases, according to the Costco website.

What About Costco’s Gas Quality?

Many Costco supports and customers alike find gas at the shopping giant to be one of the best in terms of quality. According to the Costco website, its gasoline is considered a TOP TIER™ retailer and contains five times the EPA detergent that’s usually recommended in its unleaded varieties–both regular and premium. This means fewer engine deposits and better fuel economy, which translates to better overall health for your car.

Final Take To GO

Gas stations looking to increase profit margins as drivers swipe their credit cards to fill up for weekend trips account for at least one spike. However, there are still ways to find more affordable gas, especially when looking to avoid long lines in the parking lot.

If you can time your weekly Costco shopping trip with filling up your tank, the membership may be worth the price of admission.

FAQ

  • How much gas does the average person use?
    • RocketHQ.com says that small to mid-size cars and SUVs tend to have a gas tank that holds roughly 12 gallons, while trucks and larger SUVs could hold 16 gallons or more. Pre-pandemic, the average person was filling up their tank about once a week. So if 14 gallons is the average size tank, you can determine if a Costco membership can pay for itself — and even save you money — on gas.
  • Is Costco gas cash only?
    • No, Costco is not cash only, as the fuel station is entirely self-serve, with pay-at-the-pump technology, except in states where that is prohibited. Costco accepts Visa, most PIN debit cards and Costco Shop Cards.