Is Costco Gas Good Quality? Then Why Is It So Cheap?

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Updated on November 1, 2021 by
costco gas quality
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Just about everyone knows you can get great deals on high-quality food, electronics, furniture, clothes, and a lot more at Costco. But what about gasoline?

Is it good in comparison with other gas stations, and is it worth the Costco membership fee to fill up your tank?

Is Costco Gas Good Quality?

Kirkland Signature gas is considered high-quality gasoline. It meets all the U.S. government thresholds for a “top tier” gasoline in terms of additives, efficiency, and purity. The United States federal government’s evaluation criteria for gasoline is one of the most stringent in the world.

That means Costco’s gas meets or exceeds the quality of any other top-tier gasoline and exceeds the quality level of any gasoline that does not make the top tier.

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The Average Household Income in the United States

How Much Does Costco Gas Cost?

Costco per gallon gas prices are generally about 17 to 21 cents lower per gallon than the gasoline of any of their competitors, depending on location.

How Is Costco Gas So Much Cheaper?

The secret to Costco’s gasoline prices lies in its membership structure. Part of every membership fee goes to offset the price of discounted items. That includes the price per gallon for gasoline.

Most Costco members do not get their gas from Costco, though, or only get it when it is convenient, such as when they are shopping for other products. That means part of their fees offset the cost of gasoline to Costco directly.

Part of that savings is passed onto the retailer’s members.

The Break-Even Point

As with any business, Costco does not lose money on its gasoline. If you are a member, you get a discount, but a portion of your dues covers that discount.

To break even on your dues, you would have to fill up with Costco gas on average about 35 times per membership cycle. Each membership cycle is one year from the point of purchase. If you buy other products besides gas when you shop at Costco, you hit that break-even point quicker.

So, Is Costco Gas Worth It?

To figure out if Costco gas is good and if the discount is worth it, consider the following: Costco gasoline is top-tier quality as per the U.S. government’s rating system for efficiency, additives, and purity.

So in terms of quality, Costco’s gas is as good, at least, as any of its competitors.

The prices are on average $0.17-$0.21 per gallon less expensive than other places that carry gasoline. To break even on your membership dues, you will need to go to Costco to fill up on gas about 35-40 times a year. That works out to filling up at Costco about three times a month.

That remains the case if you buy nothing else from Costco. If you do purchase other goods from the retailer, you break even quicker. Most members buy a lot more from Costco, meaning they break even on the cost of their membership faster.

On the whole, that is why Costco gas is good in terms of quality and worth.

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