Costco Gas: Where Savings Can Pay for Membership the Fastest

One of Costco’s biggest ways to save doesn’t involve setting foot inside a warehouse.

The wholesale club has been selling gasoline since 1995, and many US warehouses now have pumps for members to top up. The company is even set to open its first-ever stand-alone gas station in California this year.

The savings make gasoline one of the biggest ways shoppers say their annual membership fee basically pays for itself.

Indeed, when Business Insider analyzed prices of other products that offset the membership fee, which starts at $65 a year, many readers reached out to say that gasoline gave them the most savings.

Your mileage may vary — literally.

Nevertheless, we did the math to find out where in the US Costco shoppers can get the most bang for their buck at the gas pump.

First, we asked fuel market analyst Patrick DeHaan at GasBuddy, an app that finds deals, how many gallons the typical American driver buys in a year. He said 600, which works out to roughly 40 purchases of 15 gallons each.

We then identified 12 Costco warehouses in metro areas that cover the continental US and compared their gas station prices to GasBuddy’s average price for those local markets on the same day.

In Chicago, given the large size of its county, we adjusted the market price to better reflect gas stations in the immediate vicinity of the selected Costco warehouse. Other spot checks showed the GasBuddy county averages to be on par with gas prices nearest the warehouses we looked at.

As of Wednesday, January 21, Costco’s gas price advantage ranged from $0.16 to $0.95, which we multiplied by 600 to arrive at an annual payback score. A score of 100 means the $65 fee was fully offset by savings from buying exclusively from Costco.

Bear in mind that this analysis looked at price gaps at a single point in time, whereas fuel prices often change daily. Even so, Costco tends to be about $0.20 per gallon cheaper than conventional sellers, according to a 2019 study by the Oil Price Information Service.

In all locations we looked at, drivers who buy 600 gallons a year from Costco would save more than the $65 annual fee. In fact, even with the lowest price difference in this list, the break-even amount is 400 gallons, which works out to about 10,000 driving miles a year.

Read on to see where Costco members benefit most, ranked from lowest to highest.

Atlanta

Atlanta had the smallest price difference among the cities in this analysis, with Costco selling a gallon of regular gas for $2.49, $0.16 below the GasBuddy average for DeKalb County.

At 600 gallons a year, that $0.16 works out to a savings of $96 compared with typical fuel sellers, or a payback score of 147.

New York City

Most New York Costco locations do not sell gas, but the Staten Island warehouse does. At $3.08 per gallon, Staten Island also has higher average gas prices than those in other boroughs of New York City, according to GasBuddy.

Costco’s price was $0.23 cheaper for annual savings of $138 and a payback score of 212, meaning the membership fee would be offset twice.

Washington, DC

A Costco warehouse in the DC suburb of Alexandria, Virginia, had gas for $2.46 per gallon, a $0.26 discount to the local average price. A year of savings at that level would amount to $156, or a payback score of 240.

Dallas

The Dallas Costco’s gas price of $2.25 was $0.29 less than the local average. That works out to annualized savings of $174, or a payback score of 268.

Seattle

For Seattle, we chose the warehouse in Costco’s headquarters town of Issaquah, where the average local price was $4.02. Costco’s price of $3.69 was $0.33 lower for annualized savings of $198 and a payback score of 305.

At that rate, the $65 membership fee would be offset three times.

Denver

The Costco in the Denver suburb of Aurora had a gas price of $2.09, which was $0.33 below the local average of $2.42. It also has annualized savings of $198 and a payback score of 305.

St. Louis

St. Louis was the third city in this list to notch a 305 payback score. Its Costco warehouse had gas for $2.29, compared to a local average of $2.62.

Detroit

The Costco in the nearby town of Roseville had a gas price $0.35 cheaper than the local average, at $2.53 versus $2.88. That works out to annualized savings of $210 and a payback score of 323.

Minneapolis

The most centrally located Costco in Minneapolis is a Business Center, which typically caters more to commercial shoppers than households. Still, any member can shop there.

That location’s gas price of $2.43 was $0.36 below the local average of $2.79, for an annualized savings of $216 and a payback score of 332.

Boston

Costco’s warehouse in the suburb of Dedham had a gas price of $2.34, $0.42 below the local average. That works out to annualized savings of $252 and a payback score of 388.

Miami

Costco’s Miami warehouse had gas at $2.34, $0.46 below the local average of $2.80. Over the course of a year, that would mean $276 in savings and a payback score of 425, more than four times the cost of the basic membership fee.

Los Angeles

California has some of the highest gas prices in the country, and LA in particular has some of the state’s highest fuel costs, but Costco members can get some significant savings. The Alhambra warehouse had a gas price of $3.67, while the local average of $4.32.

That $0.65 difference amounts to annualized savings of $390 for a payback score of 600, which would offset the basic membership fee six times.

Chicago

GasBuddy’s data for Chicago covers the large area of Cook County, which includes both the dense downtown and more sprawling suburbs. In this case, we adjusted the market price to reflect stations in the immediate vicinity of the South Loop warehouse.

That location had gas at $2.85 per gallon — a whopping $0.95 less than the typical $3.80 price in the neighborhood. The spread was similar at the Lincoln Park warehouse, but somewhat narrower at other locations around the city.

At this rate, the annualized savings would be $570 for a payback score of 877, nearly nine times the cost of the basic membership fee.

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