Costco is launching a standalone gas station network featuring a 40-pump discount fuel hub.

      Jorge Villalba/Getty, cropped by the author

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      With fuel prices rising towards unprecedented levels, Costco parking lots resemble scenes from Mad Max rather than typical suburban stores. Members are currently enduring long waits for a few cents off the gallon, making Costco’s upcoming announcement seem particularly well-timed: The retail behemoth is just months away from launching its first standalone gas station with 40 pumps offering discounted fuel. Just remember, a membership card will be required for entry.

      Costco has been selling gasoline at large stations in its warehouse parking lots since 1995, the same year it introduced the Kirkland Signature brand, which operates on a similar principle: offering high-demand products—be it laundry detergent or 87-octane gasoline—at prices that feel like a bargain by eliminating marketing and middlemen. Costco then recoups its costs through ongoing membership fees.

      This has led the brand to intensify its efforts against card sharing among members. To access the perks, you must purchase a membership; shareholders benefit only when membership numbers increase.

      A membership will be mandatory to use the first standalone Costco Gasoline station, set to launch in Mission Viejo, California, in June (located at 25732 El Paseo, replacing an old Bed, Bath & Beyond). A second station is expected in Hawai’i, slated for 2027—this makes sense given that the Iwilei (Honolulu) location hosts the busiest Costco globally. Moreover, my colleague Byron Hurd has uncovered that Costco is considering Livonia, Michigan, for another large fuel station. It’s safe to say there will be more than two if Costco’s strategy succeeds.

      However, it has been confirmed that the 17,000-square-foot fuel station opening in Southern California will not have a convenience store, not even a small one where you might buy outdated frozen pizza or a dusty bottle of Gatorade. Costco is banking on the fuel prices alone to draw people into its membership model.

      While a 40-pump station may not rival the massive Buc-ee’s, it is still significantly larger than most fuel stations.

      I suspect many will be hoping for a Costco hot dog stand at these locations, and I wouldn't be surprised if unlicensed vendors appeared with snacks unless they’re shooed away. Officially, though, the concept here focuses solely on high-volume, quick transactions for fuel.

      If you enjoy conspiracy theories, the notion that “Costco convinced the U.S. President to provoke a conflict with Iran to increase fuel prices before unveiling its major gas station” might serve as an interesting topic for podcasters. I won’t give that idea any validity, though, and this isn’t Costco responding to current market dynamics. Plans for this fuel station have been in development for quite some time.

      On a serious note, the unfortunate geopolitical climate we’re experiencing makes discounted fuel significantly more enticing, a fact that Costco is certainly aware of. As Costco CFO Gary Millerchip remarked during the company's Q2 earnings call for 2026: “When prices rise, members are likely to make the extra effort to reach the gas station because of the added value they perceive.”

      In simpler terms: People are inclined to wait in a 20-minute line to save $12, even if it costs them $2 in fuel to keep their air conditioning running.

      Costco Gas Mathematics

      For those curious whether these gas stations can actually save you money, here are some details. Costco offers two membership tiers: "Executive" ($130 annually plus tax) and "Gold Star" ($65 annually plus tax). Both tiers allow access to "Member-Only Fuel Pricing on TOP TIER Gasoline" at "over 750" stations—it's safe to presume that either membership will grant you access to the new fuel pumps when they become available.

      Since Costco gas holds the "Top Tier" endorsement, indicating that it meets the purity standards agreed upon by most automakers, I’d feel confident using it in any standard vehicle. Now, let’s compare some numbers.

      The National Average: As of April 7, the national average price for regular 87-octane gasoline was $4.14 per gallon, as reported by AAA. This marks a significant rise from the $2.80–$3.00 range we witnessed earlier in the year.

      The Costco Delta: Analysts and recent reports (from Fast Company and The Street) show that Costco is currently pricing gas below local averages by $0.20 to $0.40 per gallon.

      The High-Cost Variance: In pricey markets like Los Angeles or Honolulu (where the new standalone stations are planned), the difference is even more pronounced. For example, while averages in Los Angeles County hover near $5.90, certain Costco locations have been observed to be as much as $0.47 cheaper than the average