Why is Costco gas so much cheaper

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Elysium
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Why is Costco gas so much cheaper

Post by Elysium » Sat Dec 01, 2018 1:33 pm

I am saving a dollar almost per gallon lately, up to the tune of $20 every full fill. This is such a great deal! why is that so? talk about free lunches.. I will end up saving almost $1000 a year at this rate :sharebeer

02nz
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Re: Why is Costco gas so much cheaper

Post by 02nz » Sat Dec 01, 2018 1:39 pm

Obviously the savings will vary by location, but a dollar a gallon sounds like a lot. Where I am (SoCal) Costco is about 50 cents less than big names (Chevron, Exxon). But thanks to my Volt I have to make very few trips to the gas station!

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JoMoney
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Re: Why is Costco gas so much cheaper

Post by JoMoney » Sat Dec 01, 2018 1:43 pm

Is there a nearby gas station that's selling gas for $1 a gallon more?
That seems pretty extreme. I've seen gas stations on different sides of town varying maybe 10% or so, but $1 seems a bit much.
I would expect, that non-brand name gas that isn't spending lots of money advertising, and doesn't have a lot of 'brand loyalty' or fleet agreements with transport companies, to sell gas cheaper.
Supposedly, nothing Costco sells is marked up more than 14%, so whatever they're selling it for is probably pretty close to the market rate.... but market rates on gasoline vary over time and location quite a bit.
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kjvmartin
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Re: Why is Costco gas so much cheaper

Post by kjvmartin » Sat Dec 01, 2018 1:45 pm

Elysium wrote:
Sat Dec 01, 2018 1:33 pm
I am saving a dollar almost per gallon lately, up to the tune of $20 every full fill. This is such a great deal! why is that so? talk about free lunches.. I will end up saving almost $1000 a year at this rate :sharebeer
I've heard it referred to along the lines of a loss leader. They don't have much profit margin on any single item, but if they get you to buy enough items they'll make enough money off of you. "Oh, I'm out of milk... I can go to Meijer or Costco? I need gas too and it's cheaper there so I'll go to Costco, and while I'm there I'll get some things for meals for the week and a hot dog for dinner.."

I love Costco as a company and a place to shop. Not perfect, but suits me just fine.

iamlucky13
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Re: Why is Costco gas so much cheaper

Post by iamlucky13 » Sat Dec 01, 2018 1:52 pm

I suspect the fact that so many large stores like Costco and Safeway getting into the retail fuel business, combining their existing membership/loyalty programs with location convenience and low overhead, has reduce the sales volumes at traditional gas stations.

And Costco stations seem to have a really high traffic throughput, giving them really good economy of scale.

Also, if you're on the West coast, fuel prices in general are significantly higher here than most of the rest of the country.

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jeffyscott
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Re: Why is Costco gas so much cheaper

Post by jeffyscott » Sat Dec 01, 2018 1:52 pm

Very little difference here, just checked on gas buddy and Costco is 3 cents per gallon less than next cheapest. OTOH, don't have huge lines like we did when we went to Costco for gas on a road trip in a place where it was significantly cheaper than every other station.
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neilpilot
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Re: Why is Costco gas so much cheaper

Post by neilpilot » Sat Dec 01, 2018 1:53 pm

Today in Memphis Costco regular is $1.89/gal. When I bought gas at my nearby BP yesterday it was $1.94.

The highest price in Memphis is about $2.69, but why compare Costco to the top price?

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Re: Why is Costco gas so much cheaper

Post by 22twain » Sat Dec 01, 2018 2:15 pm

Gasbuddy.com shows the following prices in the neighborhood of the Costco in Spartanburg SC, which I picked because I happen to remember the location from passing it on the Interstate. No Costco in my town.

Costco: 1.93
others: 1.93 (Sam's Club), 1.99, 2.01 (2x), 2.17
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Blueskies123
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Re: Why is Costco gas so much cheaper

Post by Blueskies123 » Sat Dec 01, 2018 2:30 pm

Elysium wrote:
Sat Dec 01, 2018 1:33 pm
I am saving a dollar almost per gallon lately, up to the tune of $20 every full fill. This is such a great deal! why is that so? talk about free lunches.. I will end up saving almost $1000 a year at this rate :sharebeer
By now I assume you have realized your calculations are wrong or you have been buying your gas at an outrageously priced gas station. Costco does not sell their gas for $1.00 less. Our Costco is between 5-10 cents less.

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Re: Why is Costco gas so much cheaper

Post by stoptothink » Sat Dec 01, 2018 2:32 pm

jeffyscott wrote:
Sat Dec 01, 2018 1:52 pm
Very little difference here, just checked on gas buddy and Costco is 3 cents per gallon less than next cheapest. OTOH, don't have huge lines like we did when we went to Costco for gas on a road trip in a place where it was significantly cheaper than every other station.
Same. In fact, the closest Costco (~3 miles away) is $2.61 and the Holiday that is ~1/4 mile from my house is $2.58.

sport
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Re: Why is Costco gas so much cheaper

Post by sport » Sat Dec 01, 2018 2:40 pm

Gasoline at our Costco varies between 5 cents to 35 cents cheaper than the going rate nearby. Yesterday, it was 25 cents.

snowman
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Re: Why is Costco gas so much cheaper

Post by snowman » Sat Dec 01, 2018 2:41 pm

In my town, out of about 15 gas stations, Coctco is 2.19, the rest is 2.55-2.61. The difference used to be about 10 cents/gallon for months, but in the past 2 weeks Costco's price was dropping almost daily while the rest held steady. I too was wondering why such an unusually high difference in price lately.

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HueyLD
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Re: Why is Costco gas so much cheaper

Post by HueyLD » Sat Dec 01, 2018 2:44 pm

The price difference varies even within the same metro area.

I think Costco has a practice of not gouging its members. And I have observed that during periods of general price gouging by other gas stations (before and after major holidays such as the one we just had), Costco tends to be much cheaper for a week or so until other stations lower their high prices to remain competitive.

Depending on where you live, it maybe difficult to gas up at Costco due to the perpetual long lines. However, if you are flexible and can go in the middle of a work day such as 2 p.m., the lines will be much more manageable.

Currently, the local Costco gas prices are up to $0.50 cheaper than nearby places that normally have good prices. I expect the price difference to go down to less than $0.10 in a few days.

texasdiver
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Re: Why is Costco gas so much cheaper

Post by texasdiver » Sat Dec 01, 2018 2:58 pm

Here in Vancouver WA, Costco generally runs about $0.05 cheaper than its closest competition which is Fred Meyer (a regional Grocery chain) and up to $0.70 cheaper than the assorted gas stations and mini-marts depending on location. The ones closest to highway interchanges with no competition seem to be the highest.

If you are using the Costco VISA you also get 4% cash back on all Costco gas purchases which has the effect of chopping an additional $0.12 off the price for $3/gallon gas. You don't always get the cash back at stations other than Costco. Depends on the location so if you want to be sure you are getting it you need to buy at Costco. There's been a lot of internet discussion of this point.

I have a local Costco that is convenient and in the path of my various errands and commutes. I pass by it several times a day anyway to fueling up there is as convenent as anyplace else. I'm not sure how far out of my way I would bother driving if that were not the case.

Nate79
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Re: Why is Costco gas so much cheaper

Post by Nate79 » Sat Dec 01, 2018 4:11 pm

According to information at a local Costco they by rule every morning poll the prices within a certain distance of the store and then price a certain amount less than that (I think it was a min of 5 cents less or something).

squirm
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Re: Why is Costco gas so much cheaper

Post by squirm » Sat Dec 01, 2018 4:14 pm

Where do you get a dollar difference?

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Kenkat
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Re: Why is Costco gas so much cheaper

Post by Kenkat » Sat Dec 01, 2018 4:16 pm

Here Costco is $1.94 today; nearby locations range from $1.98 for Thorton’s to $2.09 for Shell / Sunoco.

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snackdog
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Re: Why is Costco gas so much cheaper

Post by snackdog » Sat Dec 01, 2018 4:25 pm

It is only four cents cheaper in Houston which is not even worth driving to Costco, much less dealing with the line.

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jabberwockOG
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Re: Why is Costco gas so much cheaper

Post by jabberwockOG » Sat Dec 01, 2018 4:27 pm

Some items to note with Costco gas comparison. Costco sell Tier 1 gas with a high quality additive package. In my town Costco gas is consistently 20-30 cents less per gallon than even cheapo supermarket and bargain basement gas stores which sell an inferior grade (no or low quality additive package). And the Costco credit cards knocks off another 4% from the price. We buy 90% of our gas from Costco, going to local Costco about once every 10 days for shopping which conveniently coincides with good opportunity to top up with gas. Costco yearly savings on gasoline alone likely pays for our membership. btw - almost never any line at all at our local Costco gas although I have seen it much busier in some bigger cities at busy times. If you want no line go get gas right as they open.

DSInvestor
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Re: Why is Costco gas so much cheaper

Post by DSInvestor » Sat Dec 01, 2018 4:31 pm

Costco : $2.79 credit
Fred Meyer: $2.84 credit
Safeway: $2.89 credit
Shell: $3.29 cash add 0.10 for credit
Mobil: $3.39 cash add 0.10 for credit
Chevron: $3.09 add 0.10 for credit

Gas stations in our area are allowed to charge higher price for credit card but Costco, Fred Meyer (part of Kroger) and Safeway do not. I have a costco credit card that gives me 4% cash back on gas purchased at Costco or elsewhere in the US.
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finite_difference
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Re: Why is Costco gas so much cheaper

Post by finite_difference » Sat Dec 01, 2018 4:41 pm

For the comparison to be fair, you need to compare Costco to other “Top Tier” gasoline fuel shops.

I think in our area it’s about 20c cheaper per gallon. So if you fill up 15 gallons, you’ll save a whopping $3. If you do that once a week that’s yearly savings of $156.

Every little but helps but nowhere near $1k, unless you are driving a lot and have multiple cars.
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RickBoglehead
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Re: Why is Costco gas so much cheaper

Post by RickBoglehead » Sat Dec 01, 2018 4:54 pm

First, Costco's profit comes from membership, not from products.

Second, Costco turns a huge amount of gas, so they can push for great pricing.

Third, Costco doesn't react to prices like other gas stations. Gas Buddy sends out an alert, "Prices are going up $.10 to $.20". Kroger goes up. Meijer goes up, others go up, Costco waits. Prices stay up, Costco goes up. Prices come right back down, Costco never moved.

They are slower to go up and faster to come down. Sometimes they are quite a bit cheaper, it's all timing.

As far as comparing them only to other Top Tier gas, that's valid if the person is only buying Top Tier gas. Many buy Costco because it's cheaper, and it it were not cheaper they'd go wherever it was cheaper.

That 4% discount is $0.10 a gallon on $2.50. But it's all 4% no matter where you buy it when using the Costco Visa...

Our closest Costco is $2.09 right now. Many other stations are $2.20 or higher. Some that are close are cash prices only...

When we drive to our cottage, we pass several Costco stores in the 80 mile ride, and the price can be $0.10 per gallon different.

Live
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Re: Why is Costco gas so much cheaper

Post by Live » Sat Dec 01, 2018 4:58 pm

I need premium gas (2007 Lexus LS460), and the $1 differential versus other gas stations is real for that car locally. However, the differential in price for regular gas is much less.

BJ's is a contender for lowest price for premium fuel, matching Costco locally.

westie
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Re: Why is Costco gas so much cheaper

Post by westie » Sat Dec 01, 2018 5:01 pm

Nate79 wrote:
Sat Dec 01, 2018 4:11 pm
According to information at a local Costco they by rule every morning poll the prices within a certain distance of the store and then price a certain amount less than that (I think it was a min of 5 cents less or something).
I remember that being done 30 years ago by gas stations. My brother managed a gas station at the time. He reported it and was told how to price the gas.
Last edited by westie on Sat Dec 01, 2018 5:02 pm, edited 1 time in total.

j0nnyg1984
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Re: Why is Costco gas so much cheaper

Post by j0nnyg1984 » Sat Dec 01, 2018 5:02 pm

texasdiver wrote:
Sat Dec 01, 2018 2:58 pm
Here in Vancouver WA, Costco generally runs about $0.05 cheaper than its closest competition which is Fred Meyer (a regional Grocery chain) and up to $0.70 cheaper than the assorted gas stations and mini-marts depending on location. The ones closest to highway interchanges with no competition seem to be the highest.

If you are using the Costco VISA you also get 4% cash back on all Costco gas purchases which has the effect of chopping an additional $0.12 off the price for $3/gallon gas. You don't always get the cash back at stations other than Costco. Depends on the location so if you want to be sure you are getting it you need to buy at Costco. There's been a lot of internet discussion of this point.

I have a local Costco that is convenient and in the path of my various errands and commutes. I pass by it several times a day anyway to fueling up there is as convenent as anyplace else. I'm not sure how far out of my way I would bother driving if that were not the case.
Not sure which Costco you go to, but I’m at the location off of Padden almost weekly. I’ve never fueled up there because I never see the prices shown anywhere like how a traditional station advertises prices.

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Flobes
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Re: Why is Costco gas so much cheaper

Post by Flobes » Sat Dec 01, 2018 5:13 pm

With piqued interest and as a curiosity exercise, I just checked Costco vs local gas stations where I live:
Costco $2.69
Valero $2.87
Phillips 66 $3.04
7-11/Conoco $3.04
Shell $3.17

Elysium
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Re: Why is Costco gas so much cheaper

Post by Elysium » Sat Dec 01, 2018 5:24 pm

My calculation is not wrong, although there are gas stations that are closer in price to costco, those aren't close to my home either. I am in the DC suburbs, and can compare gas prices around the beltway since I travel for work between DC/MD/VA. I am sure there are some stations that are cheaper, but obviously I dont' drive out of my way to find such places.

The nearest Gas station to home is Shell, and I need premium for my Lexus which is $3.44 today. Nearest Costco is 5 miles away, once a week I need to go by in that direction, so I will fill up taking no more than 2-3 miles detour. Since I was running nearly empty today I filled 2 gallons from Shell which cost me almost $7, then I waited until an errand took me near Costco and I filled 20 gallons at $2.40, a difference of $1.04.

There is a Sunoco gas station right next to the Costco though which is selling at 10-15 cents higher, but I have no reason to drive to that Gas station unless I am going to Costco, and there are no other Gas station in that area. Everything in 2-3 mile radius of where I live and work are over $3 for premium gas, and Costco is usually around $2.60 to $2.90. Normally I calculate anywhere from 50c to 80c, only today I saw $1.
Last edited by Elysium on Sat Dec 01, 2018 5:34 pm, edited 2 times in total.

runner3081
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Re: Why is Costco gas so much cheaper

Post by runner3081 » Sat Dec 01, 2018 5:27 pm

Usually only $.04-$.05 per gallon here difference.

Makes it not worth the massive lines at Costco pumps.

quantAndHold
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Re: Why is Costco gas so much cheaper

Post by quantAndHold » Sat Dec 01, 2018 5:58 pm

Gasbuddy says Costco near me (San Diego) is $3.09. Next cheapest is $3.39.

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Feb29
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Re: Why is Costco gas so much cheaper

Post by Feb29 » Sat Dec 01, 2018 6:35 pm

In the Chicagoland western suburbs Costco gas is usually 5 cents to 25 cents cheaper per gallon than the best competition.

MrDrinkingWater
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Re: Why is Costco gas so much cheaper

Post by MrDrinkingWater » Sat Dec 01, 2018 6:43 pm

I agree that there are long lines at certain times of day. I suggest that you might check your local Costco gas station hours. The gas pumps at my local Costco open at 7 AM, while the store opens at 9 AM. The gas pumps are also open later than the store; I've gassed up at 9:00 PM, maybe even 9:15 PM. I think the store stops letting customers in at 8:30 PM.

I do some activities around town every few days that take me near the Costco, so I gas up at Costco when I'm driving by for some other reason, often early in the morning, and sometimes late in the evening.

By the way, we also own a diesel truck. We've taken advantage of some very low diesel prices at the Costco stores (not our local one, at least not yet) who also sell diesel in cities we visit or pass through on trips.

texasdiver
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Re: Why is Costco gas so much cheaper

Post by texasdiver » Sat Dec 01, 2018 7:10 pm

j0nnyg1984 wrote:
Sat Dec 01, 2018 5:02 pm
texasdiver wrote:
Sat Dec 01, 2018 2:58 pm
Here in Vancouver WA, Costco generally runs about $0.05 cheaper than its closest competition which is Fred Meyer (a regional Grocery chain) and up to $0.70 cheaper than the assorted gas stations and mini-marts depending on location. The ones closest to highway interchanges with no competition seem to be the highest.

If you are using the Costco VISA you also get 4% cash back on all Costco gas purchases which has the effect of chopping an additional $0.12 off the price for $3/gallon gas. You don't always get the cash back at stations other than Costco. Depends on the location so if you want to be sure you are getting it you need to buy at Costco. There's been a lot of internet discussion of this point.

I have a local Costco that is convenient and in the path of my various errands and commutes. I pass by it several times a day anyway to fueling up there is as convenent as anyplace else. I'm not sure how far out of my way I would bother driving if that were not the case.
Not sure which Costco you go to, but I’m at the location off of Padden almost weekly. I’ve never fueled up there because I never see the prices shown anywhere like how a traditional station advertises prices.
I go to the one in Camas. It is usually about 5 cents cheaper than the Fred Meyer on 164th. All the other stations in this area of East Vancouver are between 25 and 50 cents higher, especially those near Highway 14.

I think the Costco gas price signs are usually at the entrance to the Parking Lot not the entrance to the pumps. I'm not sure about the one out there at Padden Parkway.

RetiredAL
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Re: Why is Costco gas so much cheaper

Post by RetiredAL » Sat Dec 01, 2018 7:25 pm

Location: In the middle of Sillycone Valley, the great state of Taxifornia.

At the Costco near the San Jose Airport: $3.09.

There are 8 other stations within a 3 miles radius. The lowest is $3.59 and the highest is $3.99

TheDDC
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Re: Why is Costco gas so much cheaper

Post by TheDDC » Sat Dec 01, 2018 7:33 pm

j0nnyg1984 wrote:
Sat Dec 01, 2018 5:02 pm
texasdiver wrote:
Sat Dec 01, 2018 2:58 pm
Here in Vancouver WA, Costco generally runs about $0.05 cheaper than its closest competition which is Fred Meyer (a regional Grocery chain) and up to $0.70 cheaper than the assorted gas stations and mini-marts depending on location. The ones closest to highway interchanges with no competition seem to be the highest.

If you are using the Costco VISA you also get 4% cash back on all Costco gas purchases which has the effect of chopping an additional $0.12 off the price for $3/gallon gas. You don't always get the cash back at stations other than Costco. Depends on the location so if you want to be sure you are getting it you need to buy at Costco. There's been a lot of internet discussion of this point.

I have a local Costco that is convenient and in the path of my various errands and commutes. I pass by it several times a day anyway to fueling up there is as convenent as anyplace else. I'm not sure how far out of my way I would bother driving if that were not the case.
Not sure which Costco you go to, but I’m at the location off of Padden almost weekly. I’ve never fueled up there because I never see the prices shown anywhere like how a traditional station advertises prices.
Costco displays them on a "sandwich board" type sign on the ground near the pumps at mine. I can also find them published on gas buddy.

I suspect for many it has to do with the price of convenience. For me my last three jobs (including my current one) take me past or in the vicinity of my local Costco up the street. For me it would be stupid not to take advantage of fueling up there exclusively considering the price of annual membership.

-TheDDC

PaleoWorx
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Re: Why is Costco gas so much cheaper

Post by PaleoWorx » Sat Dec 01, 2018 7:39 pm

Costco makes most of their profits off membership dues. the products they sell are sold at the minimum mark-up

Jags4186
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Re: Why is Costco gas so much cheaper

Post by Jags4186 » Sat Dec 01, 2018 7:40 pm

Costco gas price is on par with the discount gas provider in our market, Delta. The difference is Costco let’s you pay with credit card and Delta charges $0.10 more for credit card.

In general I don’t find it worth waiting on line to save $1 a fill up.

SchruteB&B
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Re: Why is Costco gas so much cheaper

Post by SchruteB&B » Sat Dec 01, 2018 8:27 pm

There is a Mobil gas station very near our Costco that sells for maybe 2 cents more than the Costco. however, it is easy in and out at the Mobil, whereas every time I drive by the Costco the gas pumps are mobbed and have lengthy waits. Worth it to pay a bit more and be on my way.

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Re: Why is Costco gas so much cheaper

Post by tomd37 » Sat Dec 01, 2018 8:31 pm

Elysium - I'm not sure your choice of premium Shell gasoline is a good choice for comparison. I say that because here in middle TN shell premium is always 90 cents higher per gallon than their regular grade. The difference between grades of other major brands is not nearly that much, no more than 50 cents per gallon. I have never figured out why Shell has such a price difference in their grades. I don't see it being any better (or much better) than other major brands premium. What model Lexus are you driving that requires premium? Comments welcome....
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tennisplyr
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Re: Why is Costco gas so much cheaper

Post by tennisplyr » Sat Dec 01, 2018 8:36 pm

Where I live Costco's price is maybe 10 cents lower than other major brands. Costco has almost 100 million members times their membership fee = beaucoup bucks.
Those who move forward with a happy spirit will find that things always work out.

tomd37
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Re: Why is Costco gas so much cheaper

Post by tomd37 » Sat Dec 01, 2018 8:48 pm

I just checked my nearest Costco (Brentwood, TN) gas prices online. They are $2.07 for regular and $2.45 for premium. The Costco website also lists the prices at six nearby major brand gas stations with their price for regular being $2.75. I did not realize there is such a differential.
Last edited by tomd37 on Sat Dec 01, 2018 8:54 pm, edited 1 time in total.
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texasdiver
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Re: Why is Costco gas so much cheaper

Post by texasdiver » Sat Dec 01, 2018 8:52 pm

tennisplyr wrote:
Sat Dec 01, 2018 8:36 pm
Where I live Costco's price is maybe 10 cents lower than other major brands. Costco has almost 100 million members times their membership fee = beaucoup bucks.
$60 membership fee x 100 million members = $6 billion.

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Random Musings
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Re: Why is Costco gas so much cheaper

Post by Random Musings » Sat Dec 01, 2018 8:53 pm

Currently, in the western Pa area where I live, Costco gas is 29 cents cheaper a gallon than the nearest competitor. Sam's Clib, which is far away, does match that price. Typically, the normal spread is between 3 and 10 cents. Not sure if the volatility in energy prices is causing this or not.

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Big Dog
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Re: Why is Costco gas so much cheaper

Post by Big Dog » Sat Dec 01, 2018 9:05 pm

The nearest Gas station to home is Shell, and I need premium for my Lexus which is $3.44 today. Nearest Costco is 5 miles away, once a week I need to go by in that direction, so I will fill up taking no more than 2-3 miles detour. Since I was running nearly empty today I filled 2 gallons from Shell which cost me almost $7, then I waited until an errand took me near Costco and I filled 20 gallons at $2.40, a difference of $1.04.

There is a Sunoco gas station right next to the Costco though which is selling at 10-15 cents higher,
Location, location, location, i.e, speed & convenience. Gas can be more expensive at Freeway exits (unless there are multiple stations there), but can be cheaper a mile or two inland. Costco gas causes other stations nearby to lower their rates to compete. A station "five miles away" has no need to do so.

Maybe a better question is, why is your local gas station so expensive? Hint: :dollar
Last edited by Big Dog on Sat Dec 01, 2018 9:53 pm, edited 1 time in total.

ssquared87
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Re: Why is Costco gas so much cheaper

Post by ssquared87 » Sat Dec 01, 2018 9:52 pm

According to gas buddy, premium in my area ranges from $3.35/gallon to $4.45

Costco is cheapest at $3.35 second cheapest is Arco at $3.63 both are top tier so they are comparable. Then there are a bunch of no name brands and 76 is next at $3.75

jjbiv
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Re: Why is Costco gas so much cheaper

Post by jjbiv » Sat Dec 01, 2018 9:56 pm

I believe they sell gas at a slim profit margin to drive traffic to their stores and to provide members with a tangible reason to renew their membership, which is where Costco makes its real money.

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Re: Why is Costco gas so much cheaper

Post by AlphaLess » Sat Dec 01, 2018 9:59 pm

texasdiver wrote:
Sat Dec 01, 2018 8:52 pm
tennisplyr wrote:
Sat Dec 01, 2018 8:36 pm
Where I live Costco's price is maybe 10 cents lower than other major brands. Costco has almost 100 million members times their membership fee = beaucoup bucks.
$60 membership fee x 100 million members = $6 billion.
Yup. Annual Earnings Data shows that Costco (COST) are in the range of $3-4B. So their earnings are essentially their membership fees. Of course, money is fungible, but ballpark, the earnings come from membership fees.
https://finance.yahoo.com/quote/COST/financials?p=COST
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jeffyscott
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Re: Why is Costco gas so much cheaper

Post by jeffyscott » Sat Dec 01, 2018 10:18 pm

texasdiver wrote:
Sat Dec 01, 2018 8:52 pm
$60 membership fee x 100 million members = $6 billion.
That would appear to be approximately the number of cardholders, not memberships. In 2017 they collected $2.6 billion in membership fees.
https://www.investopedia.com/articles/i ... p-fees.asp

Not sure if that accounts for the 2% rebates on executive memberships? I know my spouse and I (that's 2 cardholders, one executive membership fee) pay a net of little to nothing in membership fees.
press on, regardless - John C. Bogle

bsteiner
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Re: Why is Costco gas so much cheaper

Post by bsteiner » Sat Dec 01, 2018 10:21 pm

They're 10 cents lower than the next lowest one in my area as of this moment. Since they're only 3 miles from my home, I go there where possible, especially if I'm in the area and don't have to drive 6 miles round trip to get there.

letsgobobby
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Re: Why is Costco gas so much cheaper

Post by letsgobobby » Sat Dec 01, 2018 10:35 pm

AlphaLess wrote:
Sat Dec 01, 2018 9:59 pm
texasdiver wrote:
Sat Dec 01, 2018 8:52 pm
tennisplyr wrote:
Sat Dec 01, 2018 8:36 pm
Where I live Costco's price is maybe 10 cents lower than other major brands. Costco has almost 100 million members times their membership fee = beaucoup bucks.
$60 membership fee x 100 million members = $6 billion.
Yup. Annual Earnings Data shows that Costco (COST) are in the range of $3-4B. So their earnings are essentially their membership fees. Of course, money is fungible, but ballpark, the earnings come from membership fees.
https://finance.yahoo.com/quote/COST/financials?p=COST
Put another way, on average everything else is sold at cost, net of all expenses, which means I never have to worry if I'm getting a decent price; I am.

I've also read that when gas prices are falling, high volume retailers go through their supplies faster and thus can lower their prices faster - advantage, Costco.

mindgap
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Re: Why is Costco gas so much cheaper

Post by mindgap » Sat Dec 01, 2018 10:39 pm

In LA it varies a bit but usually between 30cents and 60 cents less compared to the gas stations around.

We also have Gas stations where the Gas price is a full dollar over the normal price here. I wonder why people still use those. Some people just don't care I guess.

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