Kelowna, Kamloops gas bars benefit more than just members

Kelowna drivers can expect to benefit from the new Costco gas station even if they never plan on filling up there.

Petroleum analyst Patrick De Haan with GasBuddy.com said Costco gas stations generally sell gas seven to 10 cents cheaper per litre compared to their local competition. While other stations don’t have the means to sell gas at such low rates, he said they are still forced to offer more competitive prices.

“Almost every case I’ve looked at individually, having a Costco in an area greatly increases competition,” De Haan said. “Stations nearby (in Kelowna) may start to feel a little bit of pressure.”

The new Costco gas bar in Kelowna is selling regular gas for 127.9 per litre today, Dec. 15. The Kamloops Costco is selling it for $1.39.9 per litre. Both stations are currently offering fuel for seven cents less than the next cheapest local gas station.

De Haan suspects a business like Costco might even sell fuel at a loss as a means to draw more shoppers into its wholesale store.

“It’s a completely different game, to compare the two would be apples to oranges,” he said about the business model. “A typical gas station needs the (profit) margins to survive, Costco doesn’t.”

However, many drivers won’t gas up at Costco because they don’t want to pay annual membership fees. A Costco membership also grants shoppers access to the competitively-priced items in the warehouse. But for someone only purchasing gas from Costco, and assuming there is a steady discount of seven cents per litre, a $60 membership would pay for itself after 857 litres.

READ MORE: Some of B.C.'s lowest gas prices can be found in Penticton, Vernon

Beyond the new gas station in Kelowna, fuel restrictions were lifted yesterday, Dec. 14, for motorist in the Lower Mainland and on Vancouver Island, who were asked to not purchase more than 30 litres at a time.

Despite the likely increase in consumption, De Haan said it will not put enough stress on the market to impact prices.

“Prices could go up, theoretically, but I can say with confidence that if they do move up or down it won’t be because of a removal of limitation," he said.

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