If you drive, you’ve felt the sticker shock — the average price per gallon of gas is currently up about 49% year over year (as of the end of March), according to AAA calculations.
When gas prices shoot up like that, consumers feel trapped. After all, there aren’t many practical ways to avoid higher gas prices (although there are some ways to chip away at them).
“Gas is something that many people can’t afford to go without,” says Nicole Petersen, spokesperson at GasBuddy.com. “When the price of other items go up, like meat at the grocery store, for example, many choose to simply not purchase that item until prices become more affordable. For gasoline, this isn’t always an option. The U.S. is a car-dependent country, meaning many Americans are forced to pay the higher prices at the pump to commute to work and continue on with their daily lives.”
Warehouse and membership clubs (think Costco and Sam’s Club) are being seen as “a way out” of higher gas prices for many consumers, if the long lines at Costco have been any indication. It seems simple: Pay a membership fee and, instead of paying the gas prices everyone else has to pay, you pay a discounted rate.
But is signing up for a warehouse club for the gas savings alone a smart move? We reached out to experts to help us understand why the gas prices are so high — and what to consider before you panic and sign up for a warehouse membership.
First, How Did We Get Here?
Perhaps no other site has its finger on the pulse of gas prices more than GasBuddy — the site and app allow you to find the cheapest gas near you. It’s been covering the fuel price crisis from every angle and tracks the average price per gallon, by state, in real time.
“Gas prices are currently near the highest they have ever been in the U.S.,” Petersen says.
The rollercoaster ride started in early March, when the national average price of gas jumped over 60 cents in just a week.
“Over the last week or so, gas prices have declined slightly, now sitting at about $4.23/gal on average,” Petersen says. Note: That’s still higher than the record national average high set in 2008 ($4.10 per gallon).
The reasons for this stratospheric climb are complicated but involve two major factors, Petersen says.
- What gasoline is made of: Gasoline is created from crude oil, which is obtained from drilling around the world and is sold on the global level. “The price of this oil makes up about 50% of the price you see at the pump,” Petersen says.
- Economic factors: Because oil is a global resource, supply and demand influence its price. “When more people purchase oil, prices go up. When there is too much supply, and not enough people purchasing, prices go down,” Petersen says.
Now think about what’s going on in the world. Russia’s war on Ukraine has disrupted the delicate balance of supply and demand. U.S. sanctions have removed Russia’s oil production from the market. And prices have gone up.
“Geopolitical events like this often have strong sway over oil prices,” Petersen says. “Similarly, when nobody was buying gas at the beginning of the COVID-19 pandemic, demand for oil/gas dropped, and that was why we saw such low prices in 2020.”
Can Costco, Sam’s Club and Walmart+ Help You Save on Gas?
An immediate way to avoid high gas prices is to sign up for a warehouse club, like Costco or Sam’s Club, that gives you discounts in exchange for a membership fee. Walmart+ also offers its paying members a discount on gas.
The discount you get on gas varies. Pump prices at Costco and Sam’s Club vary, just like at other stations, but based on prices on GasBuddy (and local prices near RetailMeNot’s headquarters in Austin when we checked at the end of March):
- Costco’s prices (for regular gas) are about 20 cents per gallon below the going rate, and Sam’s Club hovers at around 15 cents below.
- Walmart offers a guaranteed 5 cents off per gallon at its gas stations and at Murphy gas stations — AND it gives you the member price at Sam’s Club stations.
The reason Costco and Sam’s can go so low on fuel pricing is because they aren’t trying to make money on fuel-ups, as Kyle James from savings and shopping hacks site Rather-Be-Shopping.com points out. The goal is to get you into their parking lot and (hopefully) into their store.
We ran some numbers to calculate out how much you’ll save per tank with a Costco, Sam’s Club and Walmart+ membership — and how long it’ll take you to recoup your membership fee. Note that these numbers are rough estimates. Your mileage will literally vary, depending on your tank size, how often you fill up and how often you use the gas stations tied to your membership.
|Membership cost/yr. (Lowest-cost option)||$60||$45||$98|
|Gas discount||20 cents approx||15 cents approx||5 cents (at Walmart and Murphy Stations). Plus, get Sam’s Club fuel member prices.|
|Gas savings/tank (12 gal.)||$2.40||$1.80||$0.60|
|Gas savings/tank (15 gal.)||$3||$2.25||$0.75|
|Gas savings/tank (20 gal.)||$4||$3||$1|
|Gas savings/yr. assuming you fill up once/wk.||$124.80 (12 gal.); $156 (15 gal.); $208 (20 gal.)||$93.60 (12 gal.); $117 (15 gal.); $156 (20 gal.)||$31.2 (12 gal.);
$39 (15 gal.);
$52 (20 gal.)
|Time to recoup membership cost||15-25 weeks, depending on tank size.||20-25 weeks, depending on tank size.||99-165 weeks if you fill up at Walmart exclusively. Less time if you also take advantage of Sam’s fuel pricing.|
Note that while Costco has the quickest return on investment, based on fuel savings alone, there are other factors to consider. Walmart+, for example, is focused on free same-day delivery benefits, and the fuel discount is icing on the cake. Plus, Walmart+ membership includes membership pricing at Sam’s, so members can take advantage of cheaper Sam’s Club fuel prices, should they wish to do so.
Other Factors to Consider Before You Sign Up for Membership
It’s tempting to make a decision based on the price on the pump. But there are some things to consider (we asked Rather-Be-Shopping‘s James to help us come up with this list):
1. The Long Lines
If you’ve so much as driven by a Costco lately, especially on a weekend, you’ve seen them: the lines. “To avoid this, the single best time to get gas at Costco and Sam’s is weekdays between 10 a.m. and 11 a.m. in the morning,” James says. “Most folks are busy at work and not on their lunch breaks yet.”
Ask yourself: Am I willing to fill up at off times? Is my schedule flexible enough to allow this?
2. Whether Your Nearest Warehouse Club Actually Has an Attached Gas Station.
“Many still don’t,” James points out.
Ask yourself: Is there a warehouse club on my regular driving route that has an attached gas station?
3. The Distance You’ll Need to Drive to Fill Up
We often take for granted the ability to fill up at the corner gas station on the way home from work. But what if your nearest Costco, Sam’s or Walmart is out of your way?
Ask yourself: Will you actually save money if you have to drive out of your way to get gas?
4. The Hours
Because warehouse clubs don’t make much money from their gas stations, they’re not open late, James points out.
Ask yourself: What will you do if you need to fill up late at night? Can you consistently plan ahead to take full advantage of your warehouse club’s discount during its open hours?
5. Whether Your Warehouse Cub Really Has the Cheapest Gas
Check locally at other stations’ fuel prices. “In my town there are currently three other gas stations that are as cheap as Costco,” James says. “Granted I’d have to pay with cash to get the same price per gallon as Costco, but that’s not a big deal.” James is referring to the cash discount some stations give those who pay in cash (thus saving the station credit card processing fees). Not all stations offer them, but check the signage.
Ask yourself: Is there a nearby station that has gas as cheap as warehouse clubs’ gas that’s conveniently located? Might I be willing to pay in cash to get this discount?
So, Should You Sign Up for a Membership Club for Fuel Price Discounts?
For the fuel prices alone? Probably not. There are too many factors at play. But for the fuel prices plus the other benefits? It depends.
“My answer would be yes, it makes sense to sign up for a membership to take advantage of the gas savings ONLY if you’ll also take advantage of some of the buying opportunities within the warehouse,” James says.
If you’re thinking about signing up for a warehouse club, consider …
- The ability to get exclusive discounts and brands. At Costco and Sam’s Club, James says, “Shop in-house brands like Kirkland [Costco] and Member’s Mark [Sam’s Club]. Not only are they 10% to 25% cheaper, but they often are actually made by the name brand manufacturer and repackaged.”
- The return policy. Costco’s return policy, for example, is known for being generous. “Pretty much everything in the warehouse (except electronics) is returnable with no time limit,” James says. “You get 90 days on electronics which is still generous.”
- Bulk shopping benefits. When you buy in bulk, you get a lower price per unit, and that goes a long way toward making up for the membership fee for families. “Toilet paper, dish soap, laundry detergent, paper towels, diapers, batteries, light bulbs — these household items are a great buy at Costco, especially when buying for a family of four or more since they don’t expire and can be stored easily,” James says.
If you’re thinking about signing up for Walmart+, consider …
- How much you order groceries and other goods for same-day delivery. Walmart+ offers free same-day delivery on orders over $35.
- How much you shop online. Walmart+ gives you free shipping on ALL online orders for next-day and two-day shipping, no minimum required.
Where We’re Headed: Any Light at the End of the Tunnel?
If you’re unsure and want to take the wait-it-out approach, is there a chance gas prices could dip? Possibly, but not immediately or indefinitely.
“We have seen a small decline in gas prices over the last week, though how long this will last is still undetermined,” GasBuddy’s Petersen says. “As mentioned before, any developments in the Russian war on Ukraine could send prices right back up again. For now, we’re looking at high prices through the majority of the summer, and a potential dip back down in the fall, when gasoline demand weakens seasonally.”
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