Costco’s gas stations hit record demand in the quarter ending May 10, with some warehouses requiring multiple fuel deliveries per day just to keep pumps flowing. The final five weeks marked the company’s busiest fuel-volume period ever, CEO Ron Vachris told investors.
The surge comes as gas prices climb nationwide following escalating conflict with Iran. While overall U.S. gasoline consumption has flatlined—many drivers are simply buying less as prices rise—Costco has posted double-digit growth in gallons sold, according to Mike Baker, head of consumer research at D.A. Davidson.
How Much Costco Actually Saves You
Between April 2025 and March 2026, Costco gas prices averaged 9 cents below the five largest local competitors and 24 cents under state averages, according to Gordon Haskett research using GasBuddy data. For a family filling a 15-gallon tank weekly, that 24-cent difference adds up to roughly $187 annually.
The pricing strategy is deliberate. Costco isn’t trying to profit from fuel—it’s using cheap gas as bait to drive membership renewals and in-store spending.
The Real Moneymaker: Getting You Inside
“It’s straight out of the retail playbook,” Baker says. Lower fuel prices encourage members to visit more often, and once they’re there, they shop inside the warehouse.
Company data backs this up: members who buy gasoline visit Costco more frequently, spend more per trip, and renew memberships at higher rates than those who skip the pumps. The $60-to-$120 annual membership fee becomes easier to justify when you’re already saving hundreds on gas.
The model works because Costco operates on razor-thin margins across the board, making money on membership volume rather than markup. Gas stations become traffic drivers rather than profit centers.
What This Means for Your Wallet
As Middle East tensions keep upward pressure on oil prices, Costco’s advantage may widen. The company’s bulk purchasing power and willingness to accept minimal fuel margins give it pricing flexibility competitors can’t match.
For households watching every dollar, the calculation is straightforward: if you’re already buying groceries and household goods in bulk, adding fuel to your Costco runs turns the membership fee into genuine savings. The company is betting millions of Americans will do exactly that math—and their record fuel volumes suggest they’re right.
Key Points
- Costco gas averaged 24 cents below state prices, saving frequent users roughly $187 annually
- Record fuel demand hit during quarter ending May 10 despite flat national consumption
- Cheap gas drives membership renewals and in-store spending—the actual profit center
https://www.cnbc.com/2026/07/24/why-costco-keeps-gas-prices-so-low.html – July 24, 2026
