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Costco Gasoline & Neighboring Stations

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One of the reasons I joined Costco was because the price of gasoline at a Costco was about a ten cents (or greater) cheaper than the surrounding gas stations when I lived in College Park (the neighboring gas stations were two Exxon’s, a BP/Mobile, and a Gulf). At the time, even with a 5% rebate on gasoline credit card (AT&T Universal Cash Rewards, though here’s the latest list of the best gas credit cards), the difference in price was greater than 5% plus I had the benefit of buying in bulk at Costco for things like 7 lb. tub of nacho cheese. The downside of using Costco was that they only accepted American Express (1% cash back) or debit cards (0% cash back), so I couldn’t double dip and use a higher cash-back card with the cheaper gas, until I ran into a concrete and useful real life example of price competition.

When I moved up to Howard County, the Costco Warehouse still had gas but it also had two Exxon’s right next to it (you can debate the usefulness of two Exxon’s within a mile of each other, but whatever). Due to the proximity, the Exxon’s gas prices were depressed compared to gas stations not in the region. If you strayed more than a mile, you could see “regular” gas prices not affected by the lower Costco price.

Here is where the price competition comes into play: The Exxon gas prices are essentially pegged to be three or four cents higher than Costco’s gas price (based on my experience only, no actual concrete evidence). So I can get Exxon gasoline at a price cheaper than Costco after you factor in the 5% cash-back and current gasoline prices (at $2.00, if you can find it that cheap, you get 10 cents back).

Price competition in a capitalist society in action! I better find a pretty good reason to keep Costco around now… I mean, other than the 7 lb. tubs of nacho cheese. :)

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10 Responses to “Costco Gasoline & Neighboring Stations”

  1. FMF says:

    Check out the deal I got at Costco at http://www.freemoneyfinance.com/2005/06/great\_buy\_at\_co.html. Paid for a full year’s membership with one purchase.

    FYI — warning: REALLY CHEAPO tip coming: Visit Costco around 11:30 am on a Saturday and get a free lunch. They have so many food samples that if you try them all, you won’t be hungry until dinner!

  2. jim says:

    Hahaha, I always try to do my Costco shopping on Saturday so I can snag some free snacks. I like trying products I probably would never buy at Costco (not going to buy 23904820349230 chicken wings because if I don’t like it, I’ll still have 23904820349229 wings I don’t like).

  3. nickel says:

    Sam’s Club has similar restrictions on what credit cards you can use. In this case, it’s Discover or a store charge only. However, you can buy Walmart/Sam’s giftcards with the credit card of your choice at Wal-Mart and then use them at Sam’s. The beauty of this is that Citi treats my local Super Wal-Mart as a grocery store, presumbaly because half of it is devoted to groceries. Thus, you can rack up great rewards on those gas/grocery/pharmacy cards at both Wal-Mart and Sam’s Club.

    See here for details on the CitiCard Sam’s Club loophole.

  4. DAVE ONGLEY says:

    does anyone know where Costco gets its gasoline from. Is it the Middle East (Saudi Arabia et al), Venezuela, or the US? I’m down to my last 2390480349000 chicken wings and looking forward to buying my barrel of olives which now cost less than a barrel of oil.

  5. Ruben Ortiz says:

    where does CostCo get it’s gas?

  6. Tony says:

    Here in CA, Thelocal Costco fuel manager tells me 95% of it is from Tesoro. Costco HQ takes bids /does contracts from refiners in all areas for it’s needs. It may buy a few loads of “spot” fuel from say Chevron if the prie is right and they need it on a certain day.

    From his comments I would say in the SE and midwest where Citgo has refineries you “could” have fuel from Venezuelan crudes. Tesoro in CA refines mostly US crudes the San Joaquin Valley of CA, Alaskan North Slope and some imports from S.America and Mid-east.

  7. Tony says:

    Citibank has the AAdvantage debit card.
    for every dollar you spend you get a mileage point back. So just fill up and buy everything with your Citibank AAdvantage Debit card and not only are you getting cheaper gas; membership perks at the Costco… but points for travel…
    in the last five years I have had two round trip tickets to NYC from Miami, two more round trip tickets from Miami to London, England for me plus one more round trip ticked to Europe for my wife. Since I have to buy gas and other stuff anyway…. this beats most cash rebates (if you like free travel that is)

  8. Harry A. Hole says:

    if it comes down to whether i want to buy gas from costco or exxon… Fxxk Exxon!

  9. tony says:

    Go to penfed. They offer a 5% card as well. But you have to be a federal govt. employee or military in order to join. I believe there’s no max on how much you can get back.


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