Costco gas is almost always cheaper than the station down the street. If you've ever driven past a Costco and seen cars lined up 10 deep at every pump, you already know this. But why exactly is it so cheap?
The Membership Model Is the Key
Costco makes most of its profit from membership fees — not from selling you stuff. That single business model change gives Costco freedom to price gas (and most products) at or near cost. Regular gas stations need a healthy fuel margin to survive. Costco doesn't.
Members pay $65/year for a Gold Star membership and $130/year for an Executive membership. In 2024, Costco collected over $4.8 billion in membership fees. With that kind of guaranteed income, they can afford to sell gas at razor-thin margins.
Bulk Purchasing Power
Costco operates over 600 warehouses in the U.S. and pumps an enormous amount of fuel every day. That volume gives them serious negotiating power with fuel suppliers. They lock in favorable rates that a single neighborhood gas station simply can't access.
Low Overhead Stations
Costco gas stations are stripped-down operations. No convenience store. No carwash. No lottery tickets. Just pumps, canopy, and staff. Lower overhead means they can pass more savings to you.
How Costco Compares to Sam's Club and Walmart Gas
| Brand | Avg. Savings vs. Local Stations | Membership Required | Membership Cost |
|---|---|---|---|
| Costco | 10–25¢/gal | Yes | $65/year |
| Sam's Club | 5–15¢/gal | Yes | $50/year |
| BJ's Wholesale | 5–12¢/gal | Yes | $55/year |
| Walmart | 3–8¢/gal | No | Free (Walmart+ adds 10¢ discount) |
Does the Costco Membership Pay for Itself in Gas Savings?
If you fill up a 15-gallon tank weekly and save 15 cents per gallon compared to a local station, you save about $117 per year in fuel costs. That's almost double the cost of the $65 Gold Star membership — and that's before you count savings on groceries, tires, and everything else inside the warehouse.
Drivers who fill up 20+ gallons a week (trucks, large SUVs, people with long commutes) often save $200–$300 annually on gas alone.
Pro Tips for Getting the Cheapest Costco Gas
- Check prices online or in the app before you drive there — prices change daily.
- Go on Tuesday or Wednesday morning for the shortest lines and often the lowest prices.
- Use the Costco Anywhere Visa card to earn 4% back on gas purchases (up to $7,000/year).
- Pull forward in the lane — the pumps are on both sides, so don't wait for the "near side" pump if the far-side is open.