Case Study: Gas Savings from Membership Warehouse Clubs

Filling your gas tank sucks, especially with the prices these days. This is a look at a membership warehouse club’s gas deals to see if they can get you savings worth the annual membership.

The cost of a full tank

Cars have an average tank size between 45 and 65 liters. At ₱60 per liter of gasoline, a 55-liter tank costs ₱3,300. If you run through a full tank every 2 weeks, that’s around ₱7,071 a month and ₱86,035 per year. To give more context, this kind of usage assumes 2 trips a day, roughly between 1 to 2 cities in Metro Manila. So think, you drive to and from work. As usual, the total cost of car ownership comes into question. This is not the subject of this post, so you can read about it here instead. Basically however, Basta sa Bahay concludes a threshold on usage (either you driver farther, or you take more necessary trips) for owning a car to be worth it. Going back however, ₱7k per month is no small amount.

Enter the membership warehouse club giving gas deals

Being a bit loose on definitions, a membership warehouse club or price club, is similar to a supermarket chain with one big difference of having an annual membership fee. In return for the fees, these chains often offer lower prices and some exclusive products. To further seal the deal, price clubs will also often sell in bulk, which can further reduce your per-item prices. So business-model-wise, the membership fee is a loose commitment of members to shop at the chain, often because this is what it will take to make this fee worth it. With this, membership warehouse clubs can then lower their price because of the captive market. There will be a separate post comparing supermarket product prices in an attempt to check whether the membership fees are indeed worth it, so this post will mainly focus on how it can be for gassing up.

Landers offers a price off on gas, with conditions

Landers is the price club in the area, so let’s examine what they have to offer. They give Php10 off per liter in their Caltex stations. Normally, the requirement is that you spend ₱3,000 on the supermarket section, and this entitles you to the one-time use voucher to get the ₱10 off. During promo seasons, they will give the ₱10 off to any member. For reference, Landers’ membership fees are ₱800, but at times of the year, you can get it for as low as ₱400.

Versus a normal Caltex gas up

First, we compare the price club expense versus a normal Caltex gas up. If you can get the gas vouchers and apply to two full tanks, 2 x 55 x ₱10 = ₱1,100, you will have gotten back the cost of your membership fee. Any subsequent gas ups with the coupons are now ₱10 off cheaper than your usual gas up. In a year with our assumptions of 2 full tanks per month, that’s ₱12,100 cheaper (11 months x 2 a month x 55 liters x ₱10) annually.

Versus a non-Caltext/Petrol/Shell gas up

Reality is however that you can get cheaper gas at a non-big-3 gas station, think Seaoil or Phoenix, which for the purposes of this estimate are ₱5 cheaper per liter. Let’s take the 24 times a year sample as before. For the quick computation the price-club is cheaper still by ₱5, so that’s ₱5 x 55 liters x 24 times a year =₱6,600. Subtracting the membership fee of ₱800, you get that the membership case is ₱5,800 cheaper. So in this case, it’s still cheaper. 

Other considerations

There’s a lot in favor of the price club, particularly that it isn’t only the gas that is cheaper. First, you can time it so that membership fees are lower. Second, you also get savings on particular projects (off the bat, canned meats are on average, ₱10 cheaper also). Lastly, they also give free haircuts for any purchase. This basically means that are many ways to get back the membership fee expense. As for getting those vouchers, ₱3,000 is do-able on my case (a 2-week basis) if I get my meats (a portion of which are cheaper) get there.

The last consideration is a caveat that there are more options out there. Basta sa Bahay will later tackle fleet cards, credit cards with gas rebates and crossing to provincial rate areas. Stay tuned!

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