There’s 1 Place You Can Get Cheaper Gas

Gas prices are higher than they’ve ever been before. Many people are looking for any way to get the cheapest fuel possible. Some are even being driven to purchase a hybrid, plug-in hybrid, or electric vehicle. However, we have one helpful tip to help you save a lot of money on gas without buying a new car. Finding the cheapest gas station around isn’t easy, but there’s one place you can get cheaper gas. Costco and other wholesale clubs offer cheap gas already, but many are currently offering added discounts.

Get cheaper gas from Costco and other wholesale clubs

Fuel pump nozzle - get cheaper gas from wholesale clubs like costco and BJ's.
Fuel pump nozzle seen at a gas station | Getty

Every business is always looking for a way to get a leg up on the competition. With record-high gas prices, it’s no wonder some places are willing to take a loss. Wholesale clubs like Costco, BJ’s Wholesale Club, and others are losing money on gasoline sales. BJ’s offered a 50-cent per gallon discount to members who spent more than $100 on the same day throughout April. Additionally, the company allowed members to purchase eligible products or use store-issued credit cards to receive more of a discount. As a result, the store lost a bunch of money on gas, but the consumer got cheaper gas.

According to Barron’s, the same is true for Costco. As a chain known for offering cheaper gas, it typically charges 20-cents less per gallon than other gas stations in the same area. As of April 2022, that number had grown to an impressive 35-cent gap. In the same vein, BJ’s and Sam’s Club gasoline is now 20 cents cheaper on average across the country than other fuel providers in the same area code.

Walmart owns Sam’s Club, and is also offering its own deals on gasoline. Moreover, it announced last week that Walmart+ members could save 10 cents per gallon at over 14,000 gas stations in the U.S. Furthermore, that’s double the amount previously offered, so Walmart is taking advantage of high gas prices.

How much money can you save buying gas from wholesale clubs?

Gas prices
Gas prices going up | Getty

Barron’s says Costco’s largest market is in California. During the week ending April 23, drivers could fill their tanks at Costco for 56 cents per gallon cheaper than other stations in the area. For a 12-gallon tank, that’s around $7 in savings. Alternatively, Costco only has five locations in Montana, and members could only save seven cents per gallon.

In many states, Costco loses money when its retail prices aren’t high enough. Losing money at the pump is enough to get people into the store, but the company doesn’t make it back in states where in-store prices are low. In April, Costco lost 27 cents per gallon of gasoline sold in New Mexico during the same week. However, it lost less money in Delaware, only 17 cents per gallon. Moreover, Sam’s Club sold gas at a loss in nine states and Walmart and BJ’s in five.

How can Costco keep selling cheaper gas?

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Costco and other wholesale clubs make their money from memberships, like the discounted items sold inside. Many of these places only offer discounted gasoline to members who need to prove they’re a member at the pump. For example, a Costco membership is $60, BJ’s is $55, Sam’s Club is $45, and Walmart+ costs $98. Combining these profits with the uptick in retail sales, wholesale clubs feel better about taking a hit on fuel.

In 2021, 85% of BJ’s net income came from membership fees. That’s $361 million out of $427 million, obviously a very significant portion. Additionally, $5 billion of Walmart/Sam’s Club’s profits came from membership fees out of a total of $13.7 billion.

Is it worth the price of admission? Unless you live close enough to get gas at a wholesale club every single time, we wouldn’t recommend buying a membership just for this purpose. Additionally, because of the excellent prices, there are many long lines in these locations. Don’t drive out of your way to save a few cents per gallon because your time is probably worth more. However, if there’s value in the membership for you in retail form, the gasoline is undoubtedly a nice bonus.

Get cheaper gas before it’s too late

With wholesale clubs like Costco taking losses on gas, it’s only a matter of time before these deals end. If you are a member already, be sure to take advantage of the massive discounts. Moreover, if you’ve been on the fence about becoming a member, now might be the best time. Especially if you’re commuting in a gas guzzler every day, this type of savings at the pump might be well worth it. Costco and other wholesale clubs are the one place you can get cheaper gas right now.

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