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Is Cheap Costco Gas Worth the Membership?

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By , dealnews contributor

Ah, Costco! The Emporium of Everything, it's the one store that's got you covered from cradle (diapers) to grave (caskets). If you're a regular, you already know that this membership-only warehouse club isn't fazed by the most eclectic shopping list you can muster. But even Costco veterans, might still not consider it a go-to locale for gasoline. The fact is that Costco — a chain now some 600 stores large — offers gasoline for about 6 to 12 cents a gallon below its local competitors' prices.

As such, Costco's gas sales have helped the company's bottom line, but how do Costco's gas prices stack up when you hold them under close scrutiny?

Cheap Gas Depends on Location

Much of the answer depends on where your Costco is located. In Chicago, the Lincoln Park Costco charges $4.49 per gallon for 87 regular gas, according to GasBuddy. But that's no big bargain compared to many gas stations within a 45-minute drive of the place. Why is this?

For starters, Chicago (which has among the highest gas prices in the nation) also has rather high gas taxes within the city limits. So once you cross the border, gas prices drop sharply — a fact of life that applies even as you compare Costco stores to each other. In Bolingbrook, IL, located about 40 minutes southwest of Chicago, the local Costco sells gas for $4.07 a gallon, 32 cents a gallon cheaper than a Bolingbrook-area Shell and BP, located just a stone's throw away.

However, upon comparing gas prices amongst city gas stations, we found little to no fluctuation in price: Chicago's Lincoln Park Costco charges the same for regular as a Clark station just a block away. And gas is only 10 cents a gallon cheaper than at a Citgo station two blocks from there. What's more, we should not forget that filling up at Costco costs less partly because of its membership cost, about $55 per year for a Gold Star membership.

On the West Coast, the local Seattle Costco sells gas at a lower price than here in Chicago, but in general regular gas ranges from $3.75 to $4 a gallon, GasBuddy reports. But Costco prices aren't the cheapest; the Sam's Club at 13550 Aurora Ave. N. is. There, a gallon of gas sets back motorists $3.75 a gallon; the Costco at 4401 4th Ave. S. ranks as the sixth cheapest in town, at $3.79 a gallon. So while Costco is clearly a bargain, its prices lag behind a competing warehouse club store, four ARCO stations, and a Safeway.

Should You Buy Costco Gas?

There's no question that your local Costco will often offer the lowest gas prices in the immediate area, but there are likely other deals in town. For example, many supermarkets are offering per-gallon discounts on a particular brand of gas based on what you spend on groceries. For every $50 I spend at Jewel stores through the free My Jewel Rewards card, I save 5 cents a gallon at area Shell stations. So after a big shop, I fill up in Chicago's suburbs and usually save 40 cents a gallon off what I'd pay in the city, no matter who's selling the gas. The price will beat my local Costco every single time (though perhaps not a Costco in a far-flung suburb).

In general, if you're an all-around savvy shopper you should approach every gas run as strategically as any other shopping you do. First consult GassBuddy to find the least-expensive gas prices around and plan on filling up at a time and place where you know you'll be by cheap fuel. Also by using grocery-chain gas discounts wherever you can snag them, you'll be able to save larger increments of cash at the pump.


Related dealnews Features:
Lou Carlozo is a dealnews contributing writer. He covers personal finance for Reuters Wealth. Prior to that he was the managing editor of WalletPop.com, and a veteran columnist at the Chicago Tribune.

Follow @dealnews on Twitter for the latest roundups, price trend info, and stories. You can also sign up for an email alert for all dealnews features.

Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
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19 comments
raiderspe
Quick question, for those that get AMEX rewards or cash back on gas purchases (5%), does this work for CostCo gas. I know that stuff purchased there does not get categorized as Groceries.
HamRadioGuy
In Lou's article he has examples of driving 40 minutes to find cheaper gas. IMHO, that math does not add up. If you drive 40 minutes to buy cheaper gas, wouldn't that mean 80 minutes round trip? Wouldn't it take about 2 gallons of gas (on average) to drive 80 minutes? If gas cost $4/gallon, 2 gallons of gas would cost $8. If you purchased 16 gallons of gas, you would have to save $0.50/gallon just to break even. And that does not even take into consideration the additional wear and tear on your car and the loss of 80 minutes of your valuable time.

If the true point of this article is to answer the question "Is Cheap Costco Gas Worth the Membership?", shouldn't the article talk about average gallons of gas purchased by a household per year divided into the cost of membership compared to reasonably close competitor prices while keeping in mind Costco convenience? I doubt many people purchase a Costco membership just to buy gas.
ecvogel
I have seen gas prices go down in part of an area because a Costco was there. Many times Meijer was the same or a hair cheaper. If Costco was no there I doubt there would be a discount. It seems another Miejer there is no savings.
mswilder
Back when gas was $1.00 to $1.50 a gallon, a 5 cent discount was really worthwhile; It was still Price-Costco around here and not open to everyone. Now Costco is lucky to even be 5 cents cheaper a gallon on a $3.50 to $4.00 gallon of gas. And... you have to wait in line 10 minutes or more. Most people sit in line with the car running and the a/c going (southern arizona)... you've blown your nickels worth of savings already.
Rawmeat
Safeway here in MD around Washington, DC has gas points--save $0.10/gal for every $100 spent-- sometimes doubled (or more) depending on how much you spend or what you buy. You can save up to $1.00/gal! So I take advantage of their weekly specials to discount my grocery bill, but also I get gas rewards, and can fill up my pickup for about $10-$20 less. Plus I'm getting credit card points. Saving myself into the poor house.
dealguy
Just to weigh in, the gas prices at Costco don't make sense for me because, where I live, Costco is about 7 miles farther than Kroger gas stations, at virtually the same price. Costco's membership fee is justified to me because of a lot of little things — the ginormous rotisserie chicken for $5, bulk produce, wine selection — and the biggest thing, its best-of-breed return policy.
valle07
rotisserie chicken and Chicken Bakes FTW!!!
wurich
Here in Saint Louis, prices can change $.20 to $.50 in hours or overnight at gas stations. Costco and sams do not for some reason, and it shows with the long lines for gas when the price jumps. It will not change for a day or two.
jaspers
Forget the gas, I think I get my money's worth in rotisserie chicken. From the looks of some people they get their money back with free samples
proudpak
I wonder what made author come to conclusion that Costco is not cheaper than other gas station by limiting himself to one geographic area? It is cheaper in my area in Houston TX. Please do not publish stories related to your own personal experience without any facts bounding other geographic areas.
psaturn
gvl987 has a point on the ethanol content of gas at Costco. I really do not understand why they pursued that. Ethanol does lower mileage and it screws up the engine too. Leaves some gummy residue that you need to periodically clean using gas additive that cleans inside engine. Sam's Club apparently still has 100% gas. Too bad I am attached to the 4% cashback on Amex from Costco. And still you have to have MEMBERSHIP to purchase gas at Costco.
gvl987
Some folks may save enough to justify the membership fee.
Porcaria
LOL @ paying 55 bucks to pump gas.
Of course 55 bux to pump gas is not worth it, do you really need to write an article to prove this?
You have to take in account everything else that Costco offer with those 55 bux.

It's like asking if it worth to paying a plane ticket to ship your package.
Of course it's not, if you're willing to waste the plane seat.
Porcaria
LOL @ paying 55 bucks to pump gas.
Of course 55 bux to pump gas is not worth it, do you really need to write an article to prove this?
You have to take in account everything else that Costco offer with those 55 bux.

It's like asking if it worth to paying a plane ticket to ship a bag.
Of course it's not, if you're willing to waste the plane seat.
gvl987
Hey, cool.. I'm in Greenville, too.

Another thing to consider is the ethanol content. It'll vary from car to car, but in my case, I get about 10% better gas mileage puttering around town with the no ethanol gas I buy from the Blue Bird at the intersection of Garlington and Woodruff roads than from the Costco on Woodruff. Factor in about 950 miles a month and the price differential, and there's usually no more than a $5 per month difference in cost.

BTW, pretty sure you have to have a membership to buy gas at Costco. First thing you have to do at the pump, here anyway, is swipe your membership card.
dimka448
Double chek your facts.
You don't need to be a Costco member to buy gas at Costco gas stations. As long as you have some kind of American Express card or Debit card - you are fine
BJ's Club on the other hand does require to be a member of the club to purchase their gas.
valle07
I live in a growing city (Greenville, SC) and Costco gas is for the most part as cheap as the cheapest and cheaper than some places and on occasions, a few cents more. Now, when I shop at Costco or am near it, I get gas there, and maybe a hotdog and a soda for $1.50 since I'm there. When I'm not near it, I get gas at the place closest home because they have really good prices. If I'm near Walmart, I get gas at Murphy's with a pre-purchased walmart gift card because they take $0.10 off a gallon.
ELURIE
Here in Clackamas, Or, a suburb of Portland, Costco is usually the cheapest station when you don't have a grocery store discount. Arco sometimes is cheaper but they don't take credit cards so you don't get any money back like Costco Amex.
Raeorn
I'd like my gas to be from 1987 as well :-) ... Two years after the great Delorean Adventure...
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