Experts explain why Costco is cutting gas prices much more and faster than other major chains

[Zorro]

SAN DIEGO (KGTV) — While Costco has always been one of the cheaper options for gas, they seem to now be cutting gas prices by a much larger amount and much quicker than the major gasoline chains. Friday, the cost of regular at local Costco locations was $5.29, which is about 56 cents lower than the San Diego County average. While the average price has dropped 15-20 cents from the peak in March, Costco has lowered its already cheaper prices by more than twice that amount.

“Almost every station on GasBuddy's list of lowest prices in San Diego is now Costco," industry analyst Patrick De Haan of GasBuddy told ABC 10News.

De Haan says prices should be dropping significantly at all gas stations in California because most of the refinery issues that had helped spike prices are over. But while other gas chains are dropping prices gradually, De Haan says Costco is cutting prices aggressively. “I think they’re passing down inevitable discounts much faster. Cheers to Costco for bringing down prices.”

There are several reasons why Costco can charge less. One is that its business model on all of its products is to take a lower margin. Second, because Costco sells so much gas so quickly, it does not have to sit on inventory. While other stations may still be selling gas they bought at peak prices one or two weeks ago, Costco is likely selling gas it purchased more recently and at a lower price.

https://www.10news.com/news/local-news/experts-explain-why-costco-is-cutting-gas-prices-much-more-and-faster-than-other-major-chains

Another good reason to have a Costco membership.