Walmart perk could make gas cheaper than Costco

Many people know that when they want to fill up their cars for less, the best place to head is Costco. In fact, if you’ve ever found yourself cursing the long lines at Costco’s fuel stations, you’re not alone. Thankfully, those extra-long hoses make it possible to fill your tank from either direction, allowing lines at the pump to move more quickly and reducing bottlenecks in certain spots.But most people know Costco isn’t the fastest place to fill up. Rather, they go there because it’s the cheapest. Costco routinely charges about 30 cents less per gallon than most competing fuel stations, reports CNN. At a time when gasoline prices are up 40.5% year over year, according to the most recent Consumer Price Index, those savings are significant.But Walmart may have found a way to challenge Costco’s dominance at the pump. And it’s using a tactic out of Costco’s playbook. Walmart+ changes the math at the pumpWalmart shoppers tend to be naturally budget-conscious. And many aren’t necessarily interested in a paid membership model, which is why they stick to traditional Walmart superstores instead of signing up to shop at Sam’s Club.But for frequent shoppers or those who prefer to take advantage of grocery delivery, a Walmart+ membership can be a smart investment. Related: Sam’s Club just made a holiday closure decision Costco didn’tFor $12.95 per month or $98 per year, Walmart+ members can enjoy perks like unlimited free grocery delivery on orders of $35 or more and savings of up to 10 cents per gallon at thousands of gas stations throughout the U.S.And thanks to that discount, Walmart may be able to undercut Costco on gas prices while driving more customer loyalty.During Walmart’s first-quarter 2027 earnings call, CFO John Rainey said Walmart+ membership fee revenue growth accelerated. “In this period of elevated gas prices, members are tapping into their fuel savings benefits even more today,” he added.Walmart also has a distinct advantage over Costco with regard to gas sales, in that shopping does not require a membership.People who come to Walmart for groceries or household items may be more inclined to fill up their cars because they’re there, regardless of whether they’re subscribed to Walmart+ and eligible for the 10 cents off per gallon. 

Walmart may be able to undercut Costco on gas prices while driving more customer loyalty.David Paul Morris/Bloomberg via Getty Images

Costco gas offers a huge benefit, even if it isn’t the cheapestWhile Walmart may technically win on price at the pump, it’s Costco that wins on quality. Costco gas carries the Top Tier certification. That means it uses five times the EPA-required detergent level, which is designed to help reduce deposits and keep engines cleaner over time.Walmart and Sam’s Club fuel generally meet the minimum EPA standards, which means it’s legally compliant and safe for vehicles. But it doesn’t offer quite the same level of quality and performance as Costco fuel. More Retail:Costco sees major shift in member behaviorRetail chain shuts all locations as legal changes hit industryCostco makes major investment in online shopping for membersOf course, that distinction is not surprising. Costco has made a point to emphasize quality as much as affordability with its Kirkland brand. So it stands to reason that the company would extend that approach to its Kirkland fuel stations.During Costco’s most recent earnings call, the company said it set an all-time record on gasoline volume during the first quarter of fiscal 2027. “The high consumer price sensitivity, which fueled these record volumes, also drove many members to use our gas stations for the very first time in the third quarter,” CEO Ron Vachris said. “We believe this will drive even greater loyalty with these members in the future as members who use our gas stations typically spend more with us in the warehouse.”All told, it may be possible to get cheaper gas at Walmart than at Costco. But it may require a Walmart+ subscription and willingness to accept fuel that’s acceptable instead of outstanding.Maurie Backman owns shares of Costco.Related: Costco reveals why Kirkland keeps beating name brands