When you have a bunch of stores you do sign distribution deals with a nationwide distributor. If you buy enough fuel you might even be able to sign with an oil company that has refining capacity or their own distribution arm.

So Costco is definitely not paying the same price as your local convenience store. But they aren't getting a 35% discount either.

As many others have noted: Costco does not do loss-leaders. They're likely selling at cost or a very small profit above cost.

When we bought a house in 2021 I had 9.6kW of solar installed (and 20kWh of battery) and bought our first electric car. Since replaced it and have two electric cars now. At times like this I'm thankful for that. I make my own driving energy on my roof, covering over 80% of all driving and home electric usage.

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bluGill 2 hours ago | parent [-]

Nobody is signing a national contract for gasoline. It all comes from the local refinery, or in some cases a pipeline to a slightly more distant refinery. The final shipping is by truck and it's almost never the case that you can find a different place that you could drive a truck to that's cost effective. Shipping guests. A few more miles by truck, it's only a few dollars different, and so it doesn't cost much difference per gallon. However, when we're talking 100 miles, now you're talking about significantly more money and that shows up in the pump price. Worse, even if you are willing to pay the price, every state has different specific rules for gasoline and so there is a very high odds that only your local refinery can make the correct gasoline for your local area.

What national chains can do is specify the additive that the refiner adds. Anyone other than a national chain doesn't have enough profit to be worth trying to build their own additive package and takes the standard additives the refinery has, which are almost always a good package anyway.

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edot 40 minutes ago | parent | next [-]

This is mostly wrong, sorry. Big chains absolutely do sign national or huge regional supply agreements for gasoline, e.g. Pilot/Flying J, Buc-ee’s, Sheetz, Costco, Sam’s Club, Speedway, etc.

You have two main errors: 1) conflating refineries with terminals 2) forgetting that fuel is a fungible financial product.

There are terminals all over the country, within trucking distance of the stations they serve. Those terminals can be supplied by a nearby refinery, yes, but also one or more distant refineries connected to a pipeline or via ship, train, or barge. There is an entire swath of the energy market called "midstream" that handles this.

Once a refined fuel gets into a terminal, its refinery of origin stops really mattering for contract purposes because of swaps. Exxon can supply gasoline in one market while Marathon supplies an economically equivalent amount somewhere else. Nobody is moving “Exxon molecules”. I mean, it literally all goes into the same tank if it's the same product. They (the terminal) just keep track of who supplied how much. The detergent package is also mixed in at the terminal loading rack, along with ethanol in the case of gas, not at the refinery.

Also, very few states actually have specific rules. California is the only real pain in the butt. You might be thinking of summer vs. winter blends, where the refiners adjust the vapor pressure to reduce emission in the summer and to increase ease of engine starting in the winter. This is something every refinery can and easily does.

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giardini 2 hours ago | parent | prev | next [-]

Do we know how Costco's "additive package" rates relative to other providers (e.g., Shell's) additive packages?

Currently I buy Shell gas b/c I trust that it's good for my car's engine. Can I trust that Costco's gas is as good as Shell's?

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qmr an hour ago | parent [-]

You should be looking for "top tier" gas, which Costco sells.

	▲	edot 37 minutes ago \| parent [-]
		Correct. Beyond that, doesn't matter. Go to where the fuel is the freshest (hasn't collected water, sat in a rusty tank for a long time, etc.). So, also probably Costco.

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r58lf 2 hours ago | parent | prev [-]

weird fact. there's no refineries in florida. All the gasoline in south florida comes in via ship/barge.