With gas prices rising sharply in the early months of 2026, drivers everywhere are looking for ways to get the cheapest fuel possible. This can be done in numerous ways, from buying at gas station chains with great reward programs to seeking out those with the lowest rates across the board. A slight money-saver is Costco, which, compared to other filling stations, hasn’t increased its numbers quite as dramatically. As it turns out, this isn’t a company opting out of a moneymaking opportunity, but a deliberate move that involves not dropping prices when demand and oil costs aren’t skyrocketing.
The idea behind this strategy is almost something of an illusion from the customer’s perspective. When demand is low and gas prices drop, Costco doesn’t decrease its prices as quickly as other chains. It thus makes more money than other chains when this happens, giving it a buffer that lets it more slowly raise prices when prices jump. Customers see that Costco’s prices are stable and cheaper than other places, increasing business at its gas pumps and making up for the profit shortfalls that came during the decreased demand period.
Of course, this method is only one element of Costco’s strategy to keep up profits while offering customers gas savings. Other factors influence its ability to keep costs lower.
Other elements that help Costco keep gas costs low
Costco isn’t just a giant gas station. It’s a wholesale club that makes money from all sorts of consumers, whether they want to fill up their gas tanks, stock up on groceries, or get work done on their car. That’s to say that gas isn’t Costco’s central product, so it can handle offering rates that aren’t as beholden to supply and demand. Like any company, it wants to make some money on what it’s selling, but as just one department, it can handle running on lower profit margins if it means customers spend on Costco’s other offerings.
On top of making money through other non-gas-related avenues, a key component of Costco’s business strategy is its membership program. At either $65 or $130 per year, depending on the tier, members get access to all kinds of perks, including gas pump privileges. In addition to making money from customers using the pump, Costco receives these base membership amounts as well. From a customer perspective, getting a Costco membership just for the sake of gas savings isn’t a bad idea, especially at times when prices are soaring everywhere else.
While it’s no fun having to pay up for a Costco membership, if nothing else, at least the gas prices at the club’s pumps are likely to remain relatively low for the time being to help offset the cost. One can only hope they remain as such as rates everywhere continue to climb.
