Canberra petrol could soon get considerably cheaper with Costco to open a petrol station next to its Majura Park store.
Costco is already a major petrol retailer in the United States, and now has two petrol stations in Sydney and one in Brisbane, selling fuel more heavily discounted than supermarket chains offer with their shopper-docket discounts.
Their interstate stores are known to offer fuel between 10¢ and 20¢ a litre cheaper than rival petrol stations. However the price is available only to Costco members, who pay an annual fee of $60.
The Costco business model uses the very cheap fuel to sell memberships and lure customers to its retail warehouse stores. If fuel is 20¢ cheaper than rivals, a motorist would pay off the membership after buying just 300 litres of petrol, or around six tanks of fuel for an average small car.
Costco Wholesale Australia managing director Patrick Noone confirmed that the station was under construction and was expected to be pumping by Christmas.
“We have hundreds of gas stations in north America where we sell gasoline so we thought we’d bring the concept to Australia and help our members here save some money,” he said.
Mr Noone confirmed that Canberra would be Costco’s fourth Australian petrol station after Brisbane and Sydney and Liverpool.
But the executive hosed down the excitement around dramatically cheaper fuel, saying the Brisbane station currently offered petrol at 3¢ to 4¢ less than its competitors and 2¢ to 3¢ cheaper than in Sydney.
The news of even a slight drop surfaces amid rising fuel prices. The average cost of petrol rose 2.8¢ to 147.6¢ per litre in the week to September 21, according to the Australian Institute of Petroleum.
Unleaded petrol was more expensive in Canberra in the last week (154.7¢ per litre) than in all capital cities except Darwin (173.0c/l) and Hobart (158.3c/l).
NRMA’s regional director for the ACT, Alan Evans, said a new petrol retailer would be welcome news, as the Territory is among the country’s most expensive metro locations to buy petrol.
“The [petrol] chains operated and run by the two supermarkets dominate the market and so someone coming in to give them a bit more competition would be very welcome,” he said.
“They’re coming out of a highly competitive US market and I think they’ll push things along here, which will be good.
“It would be fantastic to have some real competition in Canberra; Sydney and Melbourne have a lot of independents giving them competition and what our research shows is where you’ve got independents or someone to compete with the two big chains, you get lower prices, and Costco seem to delight in giving the two big supermarket chains some aggravation.”
A Woolworths-operated Caltex petrol station is just a few hundred metres from the Costco store, but a Woolworths spokesperson wouldn’t comment on the specific store.
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