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How do warehouse clubs keep gas prices down?

(NewsNation) — As Americans see new record highs at gas stations across the country, many are rethinking where they fill up their tanks.

The average cost to fill up jumped 25 cents in just one week, smashing records at nearly $4.87 a gallon Monday, according to AAA. It’s double the price of gas when President Joe Biden took office. A gallon of regular gas at the time cost on average $2.38 per gallon in January 2021.

As the Biden administration tries to tame inflation, some say it’s been hard to find significant savings anywhere. But experts tell NewsNation that wholesale club stores Costco, BJ’s and Sam’s Club can be some of the best bets for cheaper gas.

Oil industry consultant Andrew Lipow says it’s partially due to good negotiating, as well as volume — the club stores buy so much gas, they can get it for less than competitors.

“The sheer amount of volume that they sell allows them to be cheaper than the convenience store that you might see at the corner,” Lipow said.

Lipow also says it’s a good marketing move. If stores can reel consumers in with cheaper gas, in some cases as much as 70 cents less than state averages, those people might buy more inside the stores.

Experts tell NewsNation that even if a consumer isn’t buying groceries or big ticket items at a club warehouse, an annual membership at $60 may be worth it if at least six gallons of gas are bought each week at 20 cents a gallon less than competitors.

“I think we’re in for a sustained period of higher gasoline and diesel prices and the consumer is going to have to look around for these club memberships or these programs with the grocery stores in order to save money going forward,” Lipow said.

Still, it depends on how much gas someone buys and how much lower the wholesale club’s price is at the time, he said.

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