As gas prices surge across the United States amid growing instability in global energy markets due to the war in Iran, drivers are flocking to Costco gas stations in record numbers, willing to sit in long lines just to save a few dollars at the pump.
How much cheaper is Costco gas?
Filling Up
It’s so much cheaper that the warehouse giant is experiencing the highest demand for gasoline in its 50-year history.
At some Costco locations, drivers are waiting 20 to 30 minutes to fill up with fuel priced about 30 cents per gallon cheaper than competing stations.
The surge comes as gas prices have climbed above $4 per gallon nationally and topped $6 per gallon in some West Coast markets. The Iran war has sent crude oil prices rising above $100 per barrel.
But how can Costco afford to sell gasoline so much cheaper?
Unlike traditional gas stations that often rely on fuel sales as a major source of profit, Costco makes only a few cents per gallon on gasoline, CNN reports. Independent stations typically mark up fuel by 25 to 35 cents per gallon to cover expenses such as rent, maintenance, payroll, and utilities.
The retailer operates approximately 747 gas stations and relies on massive sales volume rather than large profit margins. Membership fees also account for roughly two-thirds of Costco’s overall profit.
