Gas prices in the US are rising again as conflict in the Middle East escalates rapidly. According to the American Automobile Association (AAA), the average gas price nationwide on 22/7 was 4.06 USD per gallon (1.07 USD per liter), a 4.4% increase from a week prior.
To save money, many people have flocked to Costco gas stations for cheaper fuel.
According to research by financial analytics firm Gordon Haskett, based on GasBuddy data, from april 2025 to march 2026, the average gas price at Costco was 0.09 USD per gallon lower than its five largest regional competitors. Compared to the average price in states with a Costco store, prices were also 0.24 USD lower.
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People line up for gas at Costco in Franklin, Tennessee in april 2026. *Reuters*.
Demand for gas at Costco reached a record high in the quarter ending on 10/5. However, the company did not disclose specific sales figures during its earnings call. Costco CEO Ron Vachris stated that some warehouses had to receive multiple fuel deliveries daily to meet demand. In the last five weeks of the previous quarter, they also recorded their highest gas sales volume to date.
"We are seeing very strong demand for gas at Costco", said Mike Baker, head of consumer research at D.A. Davidson. While nationwide gas consumption remained largely flat due to high prices, Costco's gas sales still saw double-digit growth.
Costco's objective extends beyond simply offering cheaper gas than other stations. Company management states that maintaining low fuel prices encourages members to visit Costco more frequently, increasing in-store purchases and membership renewals.
Costco operates the world's largest membership-based warehouse club chain. Unlike regular supermarkets, customers must register for a membership card to shop here, with annual fees currently ranging from 65-130 USD. Everything here is "giant", from cotton swab boxes with nearly 2,000 pieces, toilet paper bales as large as sacks, to cheese wheels weighing 32 kg.
Chief Financial Officer Gary Millerchip stated that members who buy gas tend to visit Costco more often, spend more, and have higher membership renewal rates than other members. However, "less than half of Costco members enter the store after buying gas".
Baker believes Costco's cheap gas strategy primarily aims to "maintain the value of its membership program". "The lifeblood of Costco is its membership program", he said. In 2025, the retailer generated over 5 billion USD from membership fees, accounting for approximately 70% of the company's net profit.
For members, visiting a Costco gas station to save on fuel costs seems like a great deal. However, Lucas Bucl, a financial planner at Level Up Financial Planning, advises buyers to be aware of the company's sales strategy.
"Costco's approach follows a classic retail model: attracting customers with an appealing offer or discount program. Retailers understand that impulse purchases can lead customers to spend money on items they didn't initially intend to buy", he said.
He advises consumers to make a shopping list before entering a Costco warehouse to avoid unplanned purchases eroding the money saved on gas. "If getting gas at Costco saves you one trip, that's good. However, try to resist browsing the aisles and looking at products", Bucl said.
Ha Thu (according to CNBC, Reuters)
