Gas prices are rising again following a sharp escalation of the war in Iran. And as Americans look for ways to save money at the pump, many are turning to Costco’s gas stations for cheaper fuel.
Demand for Costco’s gasoline reached record levels during the quarter ended May 10, though the company didn’t disclose sales figures in its fiscal third-quarter earnings call. Several warehouses needed multiple fuel deliveries each day to keep up with demand, and the final five weeks of the quarter were Costco’s busiest fuel-volume weeks ever, CEO Ron Vachris said on the call.
“We’ve seen really strong demand for Costco gas,” says Mike Baker, managing director and head of consumer research at D.A. Davidson. While gasoline consumption across the U.S. has been flat as higher prices cause some drivers to cut back, Costco has seen double-digit growth in gallons sold, he says.
Costco gas prices typically ran an average of 9 cents per gallon below the five largest local competitors and 24 cents below the state average between April 2025 and March 2026, according to a study from financial research firm Gordon Haskett using GasBuddy data.
The goal isn’t just to undercut other gas stations on price. Instead, company executives say lower fuel prices encourage members to visit Costco more often, shop inside the warehouse and renew their memberships.
Members who buy gasoline generally visit Costco more frequently, spend more overall and renew their memberships at higher rates than other members, CFO Gary Millerchip said on the call. He added that “a little less than half of our members are visiting the warehouse when they visit the gas station.”
The low-cost gas strategy is “more to keep the value in the membership alive,” says Baker. “The lifeblood of Costco is that membership.”
The retailer generated more than $5 billion in membership fee revenue in 2025, equal to roughly two-thirds of its net income.
If you’re a member, swinging into the Costco gas station to save on gas can feel like a slam dunk. But it’s worth keeping the company’s sales tactics in mind, says Lucas Bucl, a certified financial planner and founder of Level Up Financial Planning.
“Costco’s approach is straight out of the traditional retail playbook — bring in customers with an attractive deal or sale,” he says. “Retailers know that impulse buying can lead to purchases shoppers didn’t intend to make.”
He recommends making a shopping list before heading into the warehouse to avoid impulse purchases that could wipe out the savings at the pump.
“If it saves you a trip, it is a good thing,” Bucl says. “However, resist the urge to cruise the aisles and browse.”
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