The Reason Costco Gas Is So Cheap (And Is It Worth It)

According to statistical site Numerator, 46% of U.S. households shop at Costco, spending an average of $3,078 per year. The brand is so popular that once you've shopped at Costco, there's an 88% chance that you'll go back. While food takes the top spot for where most Costco shoppers spend their money — benefits like how Costco's bakery deals can save you money are part of that allure — gas makes it into the third place spot right after online sales.

That said, Costco has been all over the news of late, and not all necessarily good news. As a company known for its cheap inventory of bulk items and beyond, it comes as little surprise that Costco is just one of several popular companies worried about tariffs in 2025. While that in itself shouldn't be considered reasons to not renew your Costco membership, it could have some impact on what you buy from the store going forward. While the tariffs being proposed by President Trump could take a bite out of Costco's savings, gas may still remain cheaper than other items. There are reasons why Costco's gas is so cheap, and why it may remain so in comparison to other gas providers. Let's explore why that is, and whether it's worth the trip to a Costco gas station.

The required membership to get access to Costco's gas pumps plays a huge role in keeping the price of its gas low, since membership makes up to 75% of Costco's profits and those members basically help subsidize the cost of fuel. Strategically located next to Costco stores, the impulse to buy something is also hard to resist, so the allure of cheap gas has a good chance of luring you into the store to purchase other things you want or need. There are big changes you can expect when shopping at Costco in 2025, and while the cost of a new membership may be one of them, the cost of those memberships only help to keep your gas prices down.

Also, according to Costco CFO Richard Galanti in TheStreet, "As prices went up or down a little bit, they didn't go down as fast as perhaps they could have been, which gives us, in our view, an ability to make a little more and still be the most competitive." The "little more" Galanti is referring to is $20 billion out of an average $220 billion in annual sales. Gas is an increasing part of that, and because Costco sources its gas from local refineries and distributors, your gas at Costco could be less impacted by the threat of tariffs than gas at other stores.

Costco's Kirkland Signature Gasoline is noted for its engine-cleaning attributes, and in select parts of the country, you can even get up to 99% renewable diesel made from biomass. As previously mentioned, tariffs on Canadian and Mexican gas could trigger a price hike in gas prices, in which case, a Costco membership somewhat subsidized by loyal members with paid memberships could definitely be a benefit. Finally, Costco recently announced an increase to its hours of operations, making the chore of lining up for cheap gas less of a chore if you get there at a time more convenient for you. According to an Instagram post courtesy of the Instagram account @costcodealsonline, the new schedule spots you an extra hour from Monday to Friday from 6:00 a.m. to 10 p.m., and an extra hour and a half from 6:00 a.m. to 7:30 p.m.

With all these benefits, it's difficult to see how buying a membership to take advantage of Costco gas wouldn't be worth it. The sole reason really would be there are no Costco's close enough to you to make it a sensible idea. If you're in that position, there are other tricks to save you money when buying gas.