Gasoline prices are rising again due to the rapid escalation of the Iran war. And as Americans look for ways to save money on gas, many are turning to Costco gas stations for cheaper fuel.
Costco’s gasoline demand reached record levels in the quarter that ended May 10, but the company did not disclose sales figures in its third-quarter earnings release. The last five weeks of the quarter were the busiest weeks in Costco’s history, with some warehouses requiring multiple daily fuel deliveries to meet demand, CEO Ron Vacris said on a conference call.
“We’re seeing very strong demand for Costco gas,” said Mike Baker, managing director and head of consumer research at DA Davidson. Gasoline consumption across the U.S. has remained flat as soaring prices have caused some drivers to cut back on gasoline, but Costco says it’s seeing double-digit growth in gallons sold.
From April 2025 to March 2026, Costco’s gas prices typically averaged 9 cents per gallon lower than its five largest local competitors and 24 cents lower than the state average, according to a study by financial research firm Gordon Haskett using GasBuddy data.
The goal isn’t just to undercut other gas stations in price. If anything, lower fuel prices will encourage members to visit Costco more often, shop in the warehouse and renew their memberships, company executives said.
Chief Financial Officer Gary Millerchip said on a conference call that members who buy gasoline generally visit Costco more often than other members, spend more overall and renew their memberships at higher rates. He added that “slightly less than half of our members also stop by a warehouse when they visit a gas station.”
The low-cost gas strategy “is about preserving value for our members,” Baker said. “Membership is the lifeblood of Costco.”
The company will generate more than $5 billion in membership fee revenue in 2025, representing about two-thirds of its net income.
If you’re a member, popping into a Costco gas station to save money on gas can seem like a big deal. But it’s worth keeping the company’s sales strategy in mind, says Lucas Buchl, a certified financial planner and founder of Level Up Financial Planning.
“Costco’s approach is straight out of traditional retail strategy, which is to attract customers with attractive deals and sales,” he says. “Retailers know that impulse purchases can lead to shoppers making unintended purchases.”
He recommends making a shopping list before heading to the warehouse to avoid impulse purchases that can wipe out your savings.
“If it saves you the hassle of travel, that’s a good thing,” Bucl said. “But please resist the urge to wander the aisles and browse.”
Do you want to get ahead at work? Next, you need to learn how to make effective small talk. In CNBC’s new online course, “How to Talk to People at Work,” expert instructors share practical strategies for using everyday conversations to increase visibility, build meaningful relationships, and accelerate career growth. Sign up now!
