Costco Gas: Now This is Interesting

in Case Study, Gasoline

Costco just made the question about whether folks should pay for a membership or not much more interesting, because in Ottawa they are also Costco Gas. It is not close by my house (yet), but still another interesting lure to get a membership. (since this original publishing a gas station will be opening a few blocks from my house).

You can buy a membership for you and your spouse for $55 (an amount which may have increased since then) (according to this page), so you need to save at least that much every year to justify buying the membership. If anyone cares to argue this, please comment.

At the Costco gas station, gasoline is selling for about 5 cents a litre cheaper than most gas stations in Ottawa (there are a few that area a little cheaper, but most are 5 cents more). This means to get up to the membership fee, you should have to buy about 1100 litres of gasoline over the year (assuming an average of 5 cents saving).  While this sounds like a lot, depending on what kind of vehicle you drive (and how many your family drives).

To fill up my wife’s van can take up to 80 litres of gas, so to get to 1100 litres that is less than 15 fill ups (from empty), and this is not counting my Toyota Carola (which takes about 40 litres to fill up as well).

The caveats that I would say you need to take into consideration would be:

  • How close is the Costco to your house. The Costco Gas is actually on the way to work for me, and the store is only about 8 km from my house, so I am not going way out of my way to fill up the car, but if you have to drive a long distance to get cheaper gas, you need to take that into consideration.
  • Is this good quality gas? I have no idea where they are getting their fuel from, but it seems fine to me.
  • They only stock normal and premium (two grades) and they seem to run out of fuel sometimes (given the number of cars there I am not surprised).
  • Getting the gas seems complicated to some people (they had a lot of attendants there to explain, even though it is a self-serve station), the procedure is:
    • Swipe your Costco Membership card first (or you can’t have any gas)
    • Swipe your payment card, however the only payments taken are Costco Amex, Interac Direct Withdrawal or Costco cash cards (so you can’t use other credit cards with them).
  • Right now the station is pretty darn busy, so you do have to wait to get to a pump, and they caused a traffic jam on Hunt Club on Saturday
The other interesting question is will this cause the price of gas in Ottawa (or at least in the area around the station) to drop? We shall see, they only opened a few days ago.

{ 19 comments }

  • CalgaryPotato June 23, 2016, 4:15 PM

    I don’t see how people can’t get their money’s worth out of a Costco membership. You can get most items at a larger size and half the price as you do at the grocery stores.

    I think the biggest concern with Costco is it might put the rest of grocery out of business. I don’t know what it’s like in Ontario but here in Alberta Costco at the least busiest times is way busier than Superstore at peak Saturday hour.

    Reply
    • bigcajunman June 23, 2016, 5:07 PM

      There are more going into Ottawa as well (near me).

      Reply
  • Stan January 29, 2015, 8:33 PM

    I work in fuell business and all gas we getting for costco from 3 different terminals located in nort york shell esso suncor . Where cheaper they order it from there . Cant say they have bad gas. But gas that they are getting worst than gas at petro canada different additives and less octane but it is always clean no water like small unknown stations . And just my 5cents petro canada stations calibrating all pumps monthly so if you fuel 10 liters you get 10 liters of clean gas with no water and again only nice big petro canada stations not privately owned small ones

    Reply
  • GK April 6, 2012, 6:21 AM

    Since there are comparatively few refineries, the odds are that the gasoline Costco gets in your area comes from the same refinery as the other filling stations in your area. Ignore what the side of the delivery truck says. The contract to deliver the fuel is only one aspect of buying fuel in bulk. Basically, all the gasoline for any given city or region likely comes fro 1, may 1 of 2, different refineries, even if the retailers are competitors. So the gas at your Costco and a nearby Shell station may ultimately come from a single refinery.

    Reply
  • Mildred Carroll March 16, 2012, 11:09 AM

    Why mess with Costco in the first place? I shop wholesale for my household consumables. My membership cost me $29 11 years ago and I have spent $16CDN/$12US to renew it each year. Right now, in March 2012 you can get a 1-year membership for only $1.00 (yep, that’s ONE DOLLAR). And you get Free products for 5 months for shopping every month, plus loyalty dollars to spend on more free stuff every month thereafter. Plus discounts for shopping online at other stores – the benefits are endless. Not to mention that this is a totally ‘green’ store so you’re eliminating the toxins from your home, reducing toxic waste in the environment, and improving your family’s health and safety. Request info at and I can show you how to set up your wholesale account. (Don’t worry, you don’t have to do a business, thought the business is a fun benefit!)
    Admittedly, if you need a lot of big ticket items like TVs or a ton of paper products (how much bathroom tissue can you use?) a membership might make sense, but I prefer shopping green for my normal household needs.

    Reply
  • Jeff November 13, 2011, 5:26 PM

    Hmmm … out here on the west coast, I can go to any Superstore gas station and get 3.5 cents cash back per litre AND I can use my Visa with 4% cash back for gas purchases. Sorry, way better deal than Costco.

    Reply
    • bigcajunman November 13, 2011, 5:34 PM

      Haven’t got that deal in Ottawa yet, maybe soon!

      Reply
  • Michael November 11, 2011, 9:12 AM

    Costco is very close to my home in Toronto. I buy gas there all the time and try to avoid peak times. The car lineup for gas is just crazy, especially weekends. Some people waiting in the gas line will turn off their engine after pulling ahead so they don’t burn too much fuel. But sometimes I wonder if it is worth it. To get to Costco I drive by two other gas stations that are virtually empty and anyone could fill up in 60 seconds instead of waiting at Costco. I’m glad Costco offers cheap gas but sometimes not worth the wait.

    Reply
  • Brad November 7, 2011, 12:30 PM

    Regarding the quality of the gas.

    We were there on Saturday to get gas and there was a tanker filling up their tanks.

    Keep a watch on the gas depots for trucks with Seaboard/harmac tanker trailers. That’s who Costco is currently buying gas from.

    Reply
  • gyorgy November 6, 2011, 11:09 AM

    You also need to factor in the fact that you have to drive way out of your way to get to a Costco. In my case that’s about 50 km round trip!

    Reply
    • bigcajunman November 6, 2011, 11:26 AM

      Yup, and that is an important factor. The fact that the gas station is on my way to work, makes it easier to justify using it.

      Reply
  • Gillian November 6, 2011, 6:55 AM

    I’ve had a Costco membership for years now and when they started selling gas, it made it ever more worthwhile for me to visit. At the Etobicoke store I visit (2 minutes from my home), the gas is usually about 7 cents cheaper than the surrounding stations. They’ve increased their gas delivery due to demand so they never run out and, in fact, they’re doing some construction to expand the station now because so many people visit, at all hours of the day. What I like is the gas station opens earlier and closes later than the regular store.

    Reply
  • Sunny November 4, 2011, 10:13 PM

    I think that you still need a membership to purchase gas from Costco since the first step at the pump is to swipe your membership card. They allow you to use the gift card because they don’t take cash or any other credit card other than AmEx. I fill my tank every two weeks and I will save more than enough to pay for the regular membership if I can brave the long line ups. 😉

    Reply
  • Echo November 3, 2011, 10:40 PM

    They just opened a Costco gas station in Lethbridge and yes they do accept Costco gift cards.

    It’s out of the way for me (unless I’m shopping at Costco). Safeway gas bar gives me 5 cents off with my Club Card and it’s right in the neighborhood.

    Reply
    • bigcajunman November 4, 2011, 4:40 AM

      So you don’t need a membership to use a gift card? Hmmm… good idea on their part to get you hooked.

      Reply
  • krantcents November 3, 2011, 12:36 PM

    I use Costco gas in California. It is definitely worth it. The savings on gas alone justify membership a syou said. The rest is a bonus.

    Reply
  • Andy R November 3, 2011, 11:24 AM

    Typically when Costco comes to town with gasoline, the price competition is stiff for the first little bit. However, after the excitement has died down, the other stations usually return to form. Enjoy it while it lasts!

    Reply
  • Sustainable PF November 3, 2011, 7:27 AM

    Interesting offering.
    When we travel out of town (usually east – we rarely head to the big stink) we normally take hwy7 which means Costco is not on the way. However, sometimes we opt for the 401 (which means we head a bit further west and south than we need to).

    As an MBNA smartcash card user I get 3% back on gas purchases. I usually have some gas so i’ll stop in Hastings ON where the gas is always cheaper than my city, and much better than on the 401.

    I wonder, can you use the Costco gift cards to buy gas instead of buying the membership? We are strongly considering this option for buying goods @ Costco – it would be great if we could use those gift cards instead of having to shell out $55 a year!

    Reply
  • bigcajunman November 3, 2011, 7:39 AM

    WIthout a membership card, the pump will not work, so I think your gift card idea won’t work (but check, I might be wrong).

    Reply

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