Costco’s gas price is some of the cheapest around—but why? Well, the reason behind their cheap gas is actually quite simple.

The list of reasons why Costco is one of the best places to shop just keeps getting longer. But the one thing that tops the list for the majority of their customers is the low Costco gas price. If you’re looking to save money on gas—or anything car-related, including tires—Costco is the way to go. In fact, Costco’s gas prices are the lowest in many states. So it makes sense that customers wait in line (sometimes for more than an hour) to fill up their tanks.

With gas prices steadily rising, you may be looking for a little relief on your wallet with some cheap gas. But how can the warehouse chain really keep their prices that low? Do their low prices mean the gas isn’t as good? We did some digging, and have the answer to your questions here. Before heading to Costco, you may also want to try looking into these gas apps that will save you money.

Why is gas so cheap at Costco?

The answer is simple: they just have very loyal customers. To purchase their gas, you have to be a member, and membership sales make up about 75 percent of the chain’s profit. Since new customers are enticed to sign up because of Costco’s cheap gas prices—and other great deals on everything from electronics to food—the chain can afford to price their merchandise and services much lower than competitors.

Having the gas stations right next to the store drives customers inside, too—meaning that every time a member comes to get gas, they’re also likely to drop a few dollars on food or other household goods as well, including these Kirkland items you should

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