"Costco gas is bad" is one of those claims that gets repeated at every barbecue: it's watered down, it burns faster, your mileage drops, it will wreck a BMW. This post takes each myth in turn and checks it against the evidence: fuel regulators, the Top Tier program, fueleconomy.gov, and the real cases where Costco customers did get bad gas. It ends with what to do if you think it happened to you.

Short answer: No, Costco gas is not bad for your car. Kirkland Signature gasoline is Top Tier licensed in the US and Canada, comes from the same refineries and terminals as other stations, and has the same ethanol content as most gas around it. Contamination (water, or diesel mixed into gasoline) can happen at any station, and Costco has had a few confirmed cases, most recently in Colorado in January 2026. When it happens, report it quickly to the warehouse and to your state or provincial regulator.

Is Costco gas bad for your car?

No. There is no evidence that Costco gasoline is lower quality than branded gas, and the evidence that exists points the other way. "Costco / Kirkland Signature" is on the Top Tier licensed gasoline brands list for the US and Canada, the same list as Shell, Chevron and Exxon. Costco says it adds five times the government minimum of detergent in both regular and premium; our post on whether Costco gas is Top Tier covers that in depth.

The base fuel is not special either. Costco buys unbranded gasoline from the same refineries and terminals that supply other stations in an area, and it has to meet the same specifications before it leaves the terminal (where Costco gets its gas explains the supply chain).

Myth vs fact at a glance

MythFact
Costco gas is watered downWater gets into fuel by accident (leaks, rain, condensation, delivery problems), not on purpose, and at any brand. Costco says its fuel is filtered for water and sediment.
Costco gas burns faster or gives worse mpgSame E10 base fuel as nearby stations. Mileage swings come from ethanol, winter blends, weather and driving, not the brand.
It's cheap, so it's low qualityThe low price comes from Costco's membership model and thin fuel margin, not a lower spec.
It clogs injectors or damages enginesIt is Top Tier detergent gasoline. AAA found non-Top Tier gas left 19 times more deposits.
Costco shorts you on gallons or octanePumps are tested by state weights and measures (Measurement Canada in Canada) to tight tolerances, and octane must match the pump label.
It's not good enough for a BMW or MercedesBMW co-founded Top Tier and Mercedes-Benz and Audi sponsor it. Match the octane in your manual.

Is Costco gas watered down?

No. Nobody adds water to gasoline to stretch it, and a station that did would be caught fast: water makes engines sputter and stall within minutes, which produces complaints, regulator tests and insurance claims. What does happen, occasionally and at every kind of station, is accidental water contamination.

How water gets into gas at any station

Water gets into underground tanks through condensation, moisture during a fuel delivery, or damage such as a cracked spill bucket or a loose fill cap, and heavy rain makes a bad seal worse. With E10, enough water can cause "phase separation": the ethanol binds to the water and settles to the bottom of the tank, where a pump can pick it up. Those causes were laid out in Yahoo Autos' September 2026 report, citing a fuel compliance trainer.

Costco's defence against this is filtration. Its US gasoline Q&A says "Costco fuel is filtered so that contaminants such as sediment and water do not find their way into our members' vehicles." Filters lower the risk. They do not make it zero, at Costco or anywhere else.

Real Costco bad-gas incidents

These are the documented cases we could verify. Two were terminal accidents that hit other brands too.

DateWhereWhat happenedOutcome
July 12–13, 2018Norfolk and Newport News, VirginiaThe terminal supplying both warehouses reported "an inadvertent error" that mixed a small amount of diesel into regular gasoline.Costco wrote to affected members, offered to reimburse diagnostics and repairs, and refunded all gas bought in that window with a Costco Cash Card.
2025 (reported March 2025)Metro Atlanta, GeorgiaA driver's VW dealer found water in her fuel after she filled up at Costco.Costco denied her $700 claim. Georgia's fuel regulator said the sample would likely fail on sight, but because she had not reported it at the time, linking it to Costco was hard.
January 7–8, 2026Colorado, including Costco in Colorado Springs (Barnes Road)Regular unleaded contaminated with diesel was loaded at the HF Sinclair terminal in Henderson and sent to more than 40 stations of several brands.Colorado's oil and public safety division took more than 400 complaints. Repairs were to be paid through each station's insurance and reimbursed by Sinclair.
September 2026New Orleans, LouisianaA TikTok user said a mechanic drained water from her tank after she bought premium at Costco.Unverified. Costco had not publicly responded as of Yahoo's September 27 report.

Sources: Costco's July 21, 2018 letter to members, MotorBiscuit summarising a WSB-TV investigation, KKTV and CBS Colorado, and Yahoo Autos.

The lesson from the Atlanta case is the useful one: a real problem can still end in a denied claim if nobody tested the fuel at the pump. We cover how to avoid that below.

Does Costco gas burn faster or give worse mpg?

No evidence supports it. Costco gas is ordinary E10 in most of the US, the same as nearly every station around it, so it carries the same energy per gallon. What people notice as "burning faster" is almost always something else.

  • Ethanol. E10 gives about 3% to 4% fewer miles per gallon than pure gasoline, and E15 about 4% to 5% fewer, according to fueleconomy.gov. That applies at Shell exactly as at Costco. Our Costco ethanol guide covers where Costco sells E15.
  • Winter blend and cold weather. Fueleconomy.gov says "winter grades of gasoline can have slightly less energy per gallon than summer blends," and cold weather overall can cut city mileage by 10% to 20% (fueleconomy.gov). Every station switches blends on the same schedule.
  • Driving and tires. Aggressive driving can lower highway mileage by roughly 15% to 30% (fueleconomy.gov), and under-inflated tires cost about 0.2% per psi (fueleconomy.gov). One tank is too small a sample to judge a brand.

If anything, detergent helps: AAA says carbon deposits "are known to reduce fuel economy." We found no independent test, from any source, showing Costco gas gives fewer miles per gallon than another E10 Top Tier fuel. Canadian drivers asking whether Costco gas burns faster get the same answer: Canadian gasoline is made to the same CGSB standards whatever the brand.

"It's cheap, so it must be low quality"

The price gap is real, but it comes from Costco's business model, not the fuel. Costco says in its annual report that gasoline "generally has a lower gross margin percentage" than the rest of its business, because it uses fuel to bring members to the warehouse. High volume, few staff and unbranded supply do the rest. As of our September 29, 2026 reading, Costco regular averaged $4.643/gal across 592 US stations and 173.0¢/L across 78 Canadian gas bars; check any station with the Costco gas price finder. The full breakdown is in why Costco gas is so cheap.

Does Costco gas clog fuel injectors or damage engines?

No. Clogged injectors and dirty intake valves come from too little detergent, and Costco is on the high side of that line. The Top Tier standard requires additives, tested at independent engine labs, that limit carbon deposits which "can reduce fuel economy, increase emissions and cause problems such as hard starting, hesitation and stalling," and it bans organometallic additives that harm emissions systems (Top Tier consumer FAQs). Licensed brands are checked by "unannounced random auditing."

AAA's 2016 lab tests found non-Top Tier gasolines left 19 times more engine deposits than Top Tier brands after the equivalent of 4,000 miles (AAA). AAA did not test Costco by name, but Costco is on the Top Tier list, in every grade.

One fair caveat: Top Tier says plainly that it does not "prevent all fuel-related problems." It is a detergent standard. It does not stop a contaminated delivery, which is why the incidents above can happen to Top Tier brands too.

Does Costco short you on gallons or octane?

There is no evidence it does, and both are tested by regulators, not left to the station.

Pump accuracy

In the US, state and local weights and measures inspectors test pumps against NIST Handbook 44. NIST says a pump in service may be off by no more than 6 cubic inches on a 5-gallon test, in either direction, which is about 0.5%. New pumps must be within half that. Passed pumps get a dated sticker from the state.

To put that in money: on a 15-gallon fill, the legal limit is about 0.07 gallons, roughly 32 cents at the average Costco price.

In Canada, pump accuracy is federal: Measurement Canada handles complaints about gas pumps. It notes that tank capacities in owner's manuals are only approximate, so a fill that seems "too big" is not proof of a bad pump (Measurement Canada).

Octane

Costco's US Q&A says regular is "typically 87 octane" and premium "typically 91 octane," and the posted number on the yellow pump label is the one that counts. State fuel quality programs sample gasoline for octane and other specs. In Canada, Measurement Canada says "provinces and territories are responsible for the quality of gas (octane level)." Our Costco gas grades guide explains why some stations sell 93 or 85.

Is Costco gas OK for BMW, Mercedes, Audi or Porsche?

Yes, as long as you buy the octane your manual calls for. The carmakers that worry most about fuel quality are the ones behind Top Tier. BMW helped create it in 2004 with GM, Toyota and Honda, and Audi, Mercedes-Benz and Volkswagen are current sponsors (Top Tier). Costco meets the standard those companies wrote.

The real question for a performance car is octane, not brand:

  • Manual says 91 AKI or 95 RON. Costco premium, typically 91, meets it.
  • Manual asks for 93 AKI or 98 RON. In the West, where Costco premium is usually 91, you may not find 93 at any station. Read what your manual allows as a minimum. Fueleconomy.gov notes that many newer engines retard spark timing to prevent knock on lower octane, so they run safely but give up some power and mileage (fueleconomy.gov). Where a manual lists 93 as the only acceptable grade, buy 93 wherever it is sold.
  • Premium required but you fill with regular. That is the one fuel choice that can cause harm. Fueleconomy.gov says lower octane than required can damage the engine and emissions system over time and may void your warranty.

Costco's own advice is the same: use the octane in your owner's manual.

What about Costco diesel and DEF?

Kirkland Signature diesel is on the Top Tier diesel brands list for the US and Canada, and Top Tier diesel rules also cover water and particulate contamination. Only some Costcos sell diesel (67 US stations and 6 Canadian gas bars reported a diesel price in our September 29, 2026 reading), and none dispense DEF at the pump, though many warehouses sell it in jugs. See does Costco sell diesel.

What to do if you think you got bad gas at Costco

Act the same day. Contaminated fuel usually shows up fast, often within minutes of leaving the pump, and a quick report makes it much easier to prove where it came from.

Symptoms of bad gas

  • Sputtering, stumbling or hesitation right after a fill-up
  • Stalling, hard starting or a car that will not start
  • Rough idle and a check engine light, often with misfire codes
  • Several drivers reporting the same thing at the same station

Steps to take

  1. Stop driving if the car is stalling. It can make repairs bigger.
  2. Keep the receipt. It shows the warehouse, pump, grade, time and gallons. Your Costco membership purchase history can back it up.
  3. Tell the warehouse right away. Report it to the gas station attendant or the warehouse manager and ask them to log it. In the confirmed 2018 and 2026 cases, reimbursement ran through Costco or the station's insurance.
  4. Have a mechanic save a fuel sample. Ask for a sealed sample in a clean container and a written diagnosis. A video alone was not enough in the Atlanta case.
  5. Report it to the regulator the same day. In the US that is your state weights and measures or fuel quality program (for example, Georgia's Fuel and Measures division, Colorado's Division of Oil and Public Safety, or in California the Division of Measurement Standards or your county weights and measures office). Regulators can sample the station's tanks and shut down a pump, and a failed test supports your claim.
  6. In Canada, report short pours to Measurement Canada, and fuel quality problems to your province, which regulates octane and fuel specs. Costco.ca states that "our fuel is 100% guaranteed," so start with the gas bar and warehouse.

Frequently asked questions

Why do people say Costco gas is bad?

Mostly because it is cheap and unbranded, and because a few contamination cases go viral. The fuel itself is Top Tier licensed and comes from the same refineries as other stations; the documented incidents were accidents, two of them at the fuel terminal, that also affected other brands.

Does Costco reimburse you for bad gas?

When contamination is confirmed, Costco has paid. In July 2018 it offered to reimburse diagnostics and repairs and refunded the fuel for Virginia members who bought diesel-tainted gasoline. Individual claims can be denied if the fuel was never tested, so report it to the warehouse and your state regulator right away.

Is Costco gas bad for a new car or a car under warranty?

No. Automakers require the correct octane and approve gasoline with up to 10% ethanol, which Costco sells. Using a Top Tier gasoline such as Costco's is what many manufacturers recommend.

Does Costco gas have water in it?

Not normally. Costco says its fuel is filtered to keep water and sediment out, but water contamination from a leak, rain or a bad delivery can happen at any station. If your car sputters or stalls right after filling up, report it immediately.

Does Costco gas burn faster in Canada?

No. Canadian Costco gas is made to the same CGSB standards as other brands, carries five times the CGSB detergent minimum, and contains ethanol like most Canadian gas. Winter blends and cold weather lower mileage at every gas bar.

Is Costco premium worse than Shell premium?

Both are Top Tier, so both meet the same detergent standard. Brands use different additive formulas, but no independent public test we found ranks Costco below Shell. Check the octane label: Costco premium is typically 91, and some Shell stations sell 93.

Sources