Where Costco Gas Pays for Membership Fastest

For millions of Costco members, the wholesale club's gas pumps represent one of the most significant ways to recoup the annual membership fee. The company has been selling gasoline at bargain prices since 1995, and many US warehouses now feature dedicated fueling stations for members.

A comprehensive analysis of 12 major metro areas across the continental United States reveals that the savings on gasoline alone can offset the $65 annual membership fee in every location examined. The analysis compared Costco's gas prices to local market averages on the same day, calculating potential annual savings based on typical American driving habits.

The results show that even in markets with the smallest price differences, members purchasing 600 gallons per year would save more than the cost of membership. In some locations, the savings are substantial enough to offset the fee multiple times over.

The analysis relied on data from fuel market analyst Patrick DeHaan at GasBuddy, who identified that the typical American driver purchases approximately 600 gallons annually. This equates to roughly 40 purchases of 15 gallons each throughout the year.

Researchers identified Costco warehouses in 12 metro areas covering the continental US and compared their gas station prices to GasBuddy's average price for those local markets on the same day. In Chicago, given the large size of its county, the market price was adjusted to better reflect gas stations in the immediate vicinity of the selected Costco warehouse.

The price advantage was calculated by multiplying the per-gallon difference by 600 to arrive at an annual payback score. A score of 100 means the $65 fee was fully offset by savings from buying exclusively at Costco. As of January 21, Costco's gas price advantage ranged from $0.16 to $0.95 per gallon.

Costco tends to be about $0.20 per gallon cheaper than conventional sellers, according to a 2019 study by the Oil Price Information Service.

The analysis revealed significant variation in savings across different markets, with Los Angeles and Chicago offering the most substantial advantages. California has some of the highest gas prices in the country, and Los Angeles in particular has some of the state's highest fuel costs.

In Los Angeles, the Alhambra warehouse had a gas price of $3.67 per gallon, compared to a local average of $4.32. The $0.65 difference amounts to annualized savings of $390, providing a payback score of 600—offsetting the basic membership fee six times.

Chicago showed the highest savings potential. The South Loop warehouse had gas at $2.85 per gallon—$0.95 less than the typical $3.80 price in the neighborhood. At this rate, annualized savings would be $570 for a payback score of 877, nearly nine times the cost of the basic membership fee.

• Miami: $276 annual savings (425 payback score)
• Boston: $252 annual savings (388 payback score)
• Minneapolis: $216 annual savings (332 payback score)
• Detroit: $210 annual savings (323 payback score)

Several cities in the analysis offered payback scores of 305, meaning the membership fee would be offset three times. These locations included Seattle, Denver, and St. Louis, each providing $198 in annualized savings.

In Seattle, the warehouse in Issaquah (Costco's headquarters town) had gas priced at $3.69 per gallon, $0.33 below the local average of $4.02. Similarly, the Denver suburb of Aurora offered gas at $2.09 per gallon, $0.33 below the local average of $2.42.

Other major markets showed solid returns as well. Dallas provided $174 in annual savings with a $0.29 price advantage, while Washington, DC offered $156 in savings with a $0.26 discount. Even the market with the smallest price difference—Atlanta at $0.16 per gallon—still generated $96 in annual savings, exceeding the $65 membership fee.

In all locations examined, drivers who buy 600 gallons a year from Costco would save more than the $65 annual fee.

The analysis established that even with the lowest price difference found in the list, the break-even amount is 400 gallons per year. This translates to approximately 10,000 driving miles annually for the average American driver.

This threshold is significant because it demonstrates that even drivers who don't reach the 600-gallon benchmark used in the analysis can still benefit from Costco's gas pricing. The company's consistent discounting strategy means that members who purchase fuel exclusively at Costco warehouses can expect to recoup their membership investment through gas savings alone.

It's important to note that this analysis examined price gaps at a single point in time, whereas fuel prices often change daily. However, Costco's long-standing pricing strategy suggests these savings patterns are representative of typical member experiences throughout the year.

• 400 gallons = break-even point
• 600 gallons = typical American driver usage
• 10,000 miles = equivalent driving distance
• $0.20 = average Costco price advantage

Costco's gas pricing strategy continues to be a major draw for members seeking to maximize the value of their $65 annual membership. The company is even set to open its first-ever stand-alone gas station in California this year, expanding its fueling footprint beyond traditional warehouse locations.

For members in all examined markets, the math is clear: purchasing gasoline at Costco warehouses provides substantial financial benefits that extend beyond the membership fee. Whether driving 10,000 miles annually or significantly more, the savings compound throughout the year.

The analysis confirms that gasoline remains one of the most effective ways for Costco members to offset their membership costs. With price advantages ranging from $0.16 to $0.95 per gallon across major markets, members can expect to recoup—and often significantly exceed—their annual investment through fuel purchases alone.