How Costco sells such cheap gas

(cnn.com)

4 points | by mooreds 4 hours ago

3 comments

  • thelastgallon 3 hours ago
    > Not a ‘loss leader’

    >Costco actually makes a profit on gas – a few cents per gallon. That’s substantially lower than the 25- to 35-cent markup that most gas stations take.

    Not a loss leader, but almost. Helps drive foot traffic to the store and people walk out with their carts full $400 - $800.

  • _wire_ 3 hours ago
    30c is 5–7% discount over the field. Fine, if it's on your way. But if you drive a SUV it likely costs as much to drive to the discount as the savings are worth.
    • jschveibinz 1 hour ago
      Not to mention the time lost waiting in line. This is a concept lost on many if not most people. Other truisms that are lost on people:

      1. Going 20 mph over the speed limit not only burns more fuel, it only saves a minute or two in trip time for local travel.

      2. Leaving heavy things in the back seat unsecured can result in them becoming deadly to front seat passengers in an accident.

      3. Rapid acceleration burns way more fuel.

      4. The road is very slippery right at the beginning of a rain.

      5.Braking in an emergency requires not just skidding distance but also reaction time distance. Tailgating is just not worth it.

      6. Your position in traffic in a traffic jam is meaningless to you. Being 10 cars ahead by cutting in will only save seconds in your total trip time, but your disruption of traffic may result in people losing tens of minutes behind you.

      7. Racing to close the gap to the car in front of you in a traffic jam only exacerbates the problem for people behind you by continuing the "accordion effect" on traffic. By instead going at a slow but steady speed regardless of how much distance between you and the car in front of you can help to smooth out the accordion effect for the cars behind you.

  • jqpabc123 2 hours ago
    Sorry, I don't buy gas at Costco for the same reason I don't buy gas at the local convenience store --- Costco isn't a refiner/manufacturer.

    Every "top tier" refiner has their own special formulation of additives for gasoline. These additives help prevent knocks (premature detonation) and control buildup of deposits inside your engine.

    Non-refiners tend to buy gas from any source that will sell it at a decent price and mix it all together. The resulting additive mixture is a question mark --- effectively unknown and untested.

    This is the reason that auto manufacturers tend to only recommend "top tier" gasoline. Using cheap, "Heinz 57" gas in your expensive ride doesn't make much sense to me.

    • dlcarrier 1 hour ago
      Fun fact: Costco is TOP TIER approved (https://www.toptiergas.com/gasoline-brands/), just like Marathon, Valero, ExxonMobil, Phillips 66, Chevron, Citgo, Sinckair, and BP.

      Also, the rest of those companies refine most of the gasoline in the US, and while they have their own gas stations, they also sell to other gas stations, and their fuel is just as clean, because the EPA requires it to be so, as has has been the case for decades.

      Any mixtures need to be specifically tested and approved. The gasoline market it so heavily regulated and consolidated that you can't get better or worse gas by switching suppliers, because there's pretty much no difference, other than regional variations mandated by local regulation.