Experts explain why Costco is cutting gas prices much more and faster than other major chains

[Zorro]

SAN DIEGO (KGTV) — While Costco has always been one of the cheaper options for gas, they seem to now be cutting gas prices by a much larger amount and much quicker than the major gasoline chains. Friday, the cost of regular at local Costco locations was $5.29, which is about 56 cents lower than the San Diego County average. While the average price has dropped 15-20 cents from the peak in March, Costco has lowered its already cheaper prices by more than twice that amount.

“Almost every station on GasBuddy's list of lowest prices in San Diego is now Costco," industry analyst Patrick De Haan of GasBuddy told ABC 10News.

De Haan says prices should be dropping significantly at all gas stations in California because most of the refinery issues that had helped spike prices are over. But while other gas chains are dropping prices gradually, De Haan says Costco is cutting prices aggressively. “I think they’re passing down inevitable discounts much faster. Cheers to Costco for bringing down prices.”

There are several reasons why Costco can charge less. One is that its business model on all of its products is to take a lower margin. Second, because Costco sells so much gas so quickly, it does not have to sit on inventory. While other stations may still be selling gas they bought at peak prices one or two weeks ago, Costco is likely selling gas it purchased more recently and at a lower price.

https://www.10news.com/news/local-news/experts-explain-why-costco-is-cutting-gas-prices-much-more-and-faster-than-other-major-chains

Another good reason to have a Costco membership.

[Enter stage left]

1. You can take my Costco card over my...

you get the idea.

[NJCher]

7. in NJ you can purchase Costco

gasoline without a card.

[Demovictory9]

2. The gas lines at.costco always overflow down the street

Now i know why 😁

[fierywoman]

12. The Costco gas stations in WA are open a few hours earlier and later than regular store hours --

lines are usually much shorter.

[ificandream]

28. At our local Costco, the lines are shortest first thing in the morning and just before closing.

[Hoyt]

3. It's good business for them, will attract new members at $50+ and keep current

members at renewal.

[multigraincracker]

17. Instead of making their money on hot dogs and candy bars,

they make much more on memberships.

I love the BS that big gas stations spread about "we have to sell the gas we bought already at a higher price. Yet they jump the pump price on rumors that there might be trouble in the Middle East, the next hour. This while their tanks are still full of low price gas they bought last week.

[Hoyt]

21. I can see small gas stations raising price knowing they'll have to pay significantly more soon. But

the higher prices are definitely too sticky on the way down.

[empedocles]

4. Inventory turnover is tremendous at Costco.

At my local NoVa Costco, a trucker said they were doing 5 tankers a day minimum. They do not sell older/higher priced gas.

[sboatcar]

5. There's pretty much always a truck at the costco I go to

I was just thinking about that this week, I went there twice, and both times there was the delivery truck there and lines of people waiting for gas (though lots of people don't seem to get which side of their car the gas filler is)

[Hulk]

20. Doesn't seem to matter at COSTCO which side your tank is on.

That's one of the nice things about the COSTCO's I've gone to across the country...their hoses will meet the far side of the vehicle for fueling. Wish all stations would follow their lead.

[yellowdogintexas]

6. we get our gas at Costco too. Best price around

even in Texas which appears to be running about $1.75 a gallon lower than California.

I guess you all know that any gasoline purchased using your Costco card gets the same rebate percentage as if you bought it at Costco?

I do love that little email with the rebate in February

[mountain grammy]

9. Yes. Not a fan of Citibank

But got a Costco card..definitely worth it.

[Hulk]

18. Gas in Uvalde, TX is $3.63 at H.E.B.

Yikes! Gas prices are dropping. What is the gQp going to turn to now to rile up their base (of simple idiots)?

[MichMan]

8. I would have to make a 90 mile round trip to find a Costco

Would use more gas than I would save. Also, I have a principle not to frequent retailers that charge me a fee to shop there.

[multigraincracker]

19. Same here. Plus the same for Trader Joes and

I love their stores too. There is a new one going up in East Lansing and I go that way twice a month.

[James48]

10. My nearest COSTCO is 200 miles away.

Bummer.

[Pepsidog]

11. You don't need a Costco membership to buy gas there. At least not in NJ. Credit card sales only.

[Liberty Belle]

13. Definitely cheapest though Sycuan is also much cheaper than elsewhere in San Diego.

Fortunately I have 2 Costcos near me, 1 just 5 minutes away, the other 15. I went on a weekday and the line wasn't too bad, maybe 5-10 minutes max. Well worth it.

Costco memberships are totally worth it. We save a lot on groceries (and not everything is in bulk anymore, though some items are), clothes, gifts, electronics etc. I just got a laptop computer there - better quality for less than elsewhere.

I've been a member from before it was Costco, back when it was Price Club.

[CaptainTruth]

14. My local BJs is cheap enough, plus they run 25 cents off promotions.

BJs is close by, Costo is a drive (how much is my time worth?), & BJs frequently runs promotions where if you buy 2 products of a specific brand you then get 25 cents a gallon off, on that day.

It works for me.

[NullTuples]

15. "Refinery issues" - they use that one every time here in CA

I have a fair layperson's understanding of how & why our market is often treated as separate. But I think perhaps De Haan may have forgotten that prices spiked here at the same time as everywhere else in the nation. It was sort of a big deal.

[Hulk]

16. Oh no.....the gQp is running out of reasons to hate.....

Now if inflation is under control, the poor gQp is going to have to find boogey-men that they can scare the stooges in amuriKKKa with. This was their poison for politics...."high gas prices", brought on, of course, by not letting our suffering oil companies have free rein over the land and waters off the USA to rape the land of every fucking drop of crude they can harvest.

What can they do? Just asking....cause this pedophile scare tactic is not catching on as fast as they had hoped.

[Ferrets are Cool]

22. I just filled up with premium for $4.14 a gallon at Costco.

I go out of my way to get my gas there.

[msongs]

23. 4.50 in honolulu costco nt

[SCantiGOP]

24. You guys need to put some oil platforms

Out on the beach.
Drill baby drill.

[Ohiya]

25. And it is high quality gas.

I almost always fill up at Costco, but recently I got gas at a couple of other places. I thought something was wrong with my car. It was running so badly. But, after a more recent fill up at Costco, things are back to normal.

[Yo_Mama_Been_Loggin]

26. I paid 4.29 a gallon at Costco the other day,

Least expensive in my neighborhood.

[diane in sf]

27. $4.29 is what I paid last week at Vallejo Costco. $.05 cheaper than my fill up the week before.

Gas is probably more expensive in the more bourgeois counties around the Bay, but Solano County is the Mississippi of the Bay Area counties.

I run my 36mpg econo car on regular, not exquisite or supreme.