Updated: Jan. 10, 2023
Costco's gas price is some of the cheapest around—but why? Well, the reason behind their cheap gas is actually quite simple.
The list of reasons why Costco is one of the best places to shop just keeps getting longer. But the one thing that tops the list for the majority of their customers is the low Costco gas price. If you’re looking to save money on gas—or anything car-related, includingtires—Costco is the way to go. In fact, Costco’s gas prices are the lowest in many states. So it makes sense that customers wait in line (sometimes for more than an hour) to fill up their tanks.
With gas prices steadily rising, you may be looking for a little relief on your wallet with some cheap gas. But how can the warehouse chain really keep their prices that low? Do their low prices mean the gas isn’t as good? We did some digging, and have the answer to your questions here. Before heading to Costco, you may also want to try looking into these gas apps that will save you money.
Why is gas so cheap at Costco?
The answer is simple: they just have very loyal customers. To purchase their gas, you have to be a member, and membership sales make up about 75 percent of the chain’s profit. Since new customers are enticed to sign up because of Costco’s cheap gas prices—and other great deals on everything from electronics to food—the chain can afford to price their merchandise and services much lower than competitors.
Having the gas stations right next to the store drives customers inside, too—meaning that every time a member comes to get gas, they’re also likely to drop a few dollars on food or other household goods as well, including theseKirkland items you should always buy at Costco.
Can only Costco members get gas at Costco?
Yes, only Costco members can get gas. If you’re looking to get a membership, there are two types. The Gold Star membership costs $60 per year and includes a card for you and a second card for a partner or someone else you live with. Then there’s the Executive membership, which costs $120. While this membership also includes two cards, these members will get 2% off on qualifying purchases along with access to special savings on vacations, insurance plans, and some other services. Check out these tips on how to get better gas mileage if you’re looking to save even more.
Is Costco gas considered top tier?
You might be worried that because the Costco gas prices are low, the quality of the fuel may not be great. But just like with all of the Kirkland items they sell in their warehouse, the Kirkland Signature Gasoline is top quality. It meets top-tier gasoline standards with deposit control additives to deep clean engine components for the best possible engine performance.
Are there any downsides to buying your gas at Costco?
There are a few downsides to only buying your gas at Costco, depending on how you look at it. As mentioned earlier, there can be long lines. So, if you’re in a rush or your gas light is on, it might be better to fill up elsewhere.
Also, as part of their central mission to keep operating costs to a minimum, they don’t take cash—only debit cards, Costco cash cards, or Visa credit cards. Learn more about the best gas credit cards that can save you money.
One other reason going out of your way for Costco gas might not be worth it is that not everyone has a Costco close to their house. If you find that you’re using up more gas driving all the way to the Costco pumps, saving those extra cents per gallon may not be worth it.
At the end of the day, if you plan out your shopping trip to line up with your gas fill up, it really does pay off to be a loyal customer at Costco, even if that means spending part of your morning waiting in line at the pump—it’s worth it for the cheap Costco gas price. There’s no secret to making the lines shorter, but here are secrets Costco employees don’t want to tell you.
Sources:
- CNN: “Here’s why gas is so cheap at Costco and Walmart”
- Costco: “Kirkland Signature Gasoline”
Juan Llauro/ShutterstockThe Best-Selling Item at Costco
casanisa/ShutterstockCostco Items That Won’t Actually Save You Money
Shutterstock/AHPhotosWPGWhy You Shouldn’t Buy Milk at Costco
FAQs
So why is it so much cheaper than the competition? The short answer is that unlike pretty much every other retail business that sells gasoline, Costco doesn't care about making money from its gas pumps.
Why is gas so much cheaper at Costco? ›
Why is gas so cheap at Costco? The answer is simple: they just have very loyal customers. To purchase their gas, you have to be a member, and membership sales make up about 75 percent of the chain's profit.
What makes Costco gas so good? ›
Costco offers Top-tier gasoline, ensuring that their fuel contains higher levels of detergents, which contribute to engine cleanliness over time. On the other hand, Sam's Club does not provide Top Tier gasoline. We can verify that the gas quality is not the same at Sam's Club and Costco.
Why do so many people use Costco gas? ›
The fact that gas is cheaper at Costco doesn't mean it's lower in quality. The company offers Kirkland Signature gasoline, which is formulated to improve vehicle performance and fuel economy. Costco says the gas also reduces emissions, making it better for the environment.
Is it worth driving to Costco for gas? ›
The data shows that Costco's prices aren't typically the absolute cheapest, but they're always significantly less expensive than the "average" price. This means you're more than likely getting a deal when you get gas from Costco versus another random gas station in your city.
Does Costco make money on gas? ›
Indeed, Costco's gas is so popular that the fuel sold by its 692 gas stations in 2023 represented 13% of the chain's net sales that year according to its most recent annual report. Selling attractively-priced gas also helps lure customers into its doors.
Is Costco gasoline top tier? ›
Kirkland Signature™ Fuel has been certified to meet the Top Tier™ performance standards and is available in each product we sell. If you have a question about the station, fuel or safety please email us at KirklandSignatureFuel@Costco.com.
Is Costco fuel watered down? ›
Is the gas you get from Sam's Club or Costco lower quality than gas from a regular gas station? No, in fact it probably comes from the same refinery as the gas in the regular gas station nearby.
What company does Costco get its gas from? ›
Costco does not purchase its gasoline from a single supplier; we receive our gasoline from the same major refineries and distributors that supply all of the gas stations in your area. All Costco gasoline is fully guaranteed to meet or exceed the standards of the major branded outlets.
Does Costco gas have detergent? ›
Costco is listed as a TOP TIER™ gasoline retailer. Find out more at www.toptiergas.com. Kirkland Signature™ Gasoline contains five times the EPA detergent requirement in both regular unleaded and premium grades, and is formulated to clean your engine and help your vehicle run like new.
THE ANSWER. Yes, it is worth getting a wholesale membership to save on gas prices.
Why are Costco pumps so slow? ›
Why are Costco gas pumps so slow? It is part of Costco's psychological “marketing and sales” Plan so that you will think of more merchandise to purchase when you go into the store after having gassed up.
What day of the week is best to get gas at Costco? ›
Buy Gas on Monday or Tuesday
“For gas, Mondays and Tuesdays tend to be the cheapest days to fill up your tank as demand is lower at the beginning of the week,” Anderson said.
Does Costco gas pay for itself? ›
If you're able to save $0.17 on 14.5 gallons of gas, each fill-up at Costco saves you around $2.47 compared with getting gas elsewhere. If you're looking to cover your membership fee with gas alone, you'd need to get gas at Costco between 24 and 25 times per year. If you go around twice a month, you'll easily do that.
Do Costco members pay less for gas? ›
Price check
Quality gas is important, yes, but so is price. Costco Gas Stations offer consistently low, member-exclusive prices. With the Costco app, you can check Costco gas prices on your phone. On the app, find your local warehouse to see hours of operation, gas prices and more warehouse details.
What is the benefit of getting gas at Costco? ›
Costco gas is offered at a great price
Although the exact amount of savings you'll get varies based on your location and the specific club you're shopping at, you'll typically save around $0.20 per gallon at Costco according to most online reports. Most cars hold between 10.5 and 18.5 gallons of gas.
Where does Costco gas come from? ›
Where does Costco gasoline come from? Costco buys gasoline from the market. People think that the gasoline at a Shell gas station is made by Shell.
Is Costco fuel cheaper? ›
Drivers filling up at Costco will generally save more than £6.50 a tank compared to a supermarket. RAC fuel spokesman Simon Williams said: “Drivers who aren't fortunate enough to be members of Costco will no doubt be horrified to see just how cheaply fuel can be sold.
