State law in New Jersey has long required that Costco allow anyone, including non-members, to purchase gasoline at its fuel stations. That is changing, however, due to supply chain, inflation and shortage issues.
As many of our readers know, gas is typically – though not always – cheaper at Costco than it is at other service stations. Because of this, residents of New Jersey without Costco membership have chosen to go there instead of, say, a local Shell station.
This week, however, Costco implemented the new rule across the state. Customers without memberships will now need to get one first at the Costco fuel center before being allowed to fill up their tanks.
“I always had to use my Costco card in Ohio, but here in New Jersey they never ask for it,” complained Carnita Brown to the Courier Post. “I wonder why it’s going to change … and I have no idea if it’s legal to do that here.”
It apparently is legal, however. While Costco tried back in 2004 to allow only members to buy gas at its stations, only to have the state government shoot down the proposal, this time around things are different.
“The practice of offering members-only gasoline sales does not violate any of New Jersey’s consumer protection laws,” announced Steve Barnes, a state consumer affairs spokesman, to NJ.com.
Gas prices in recent days have eased ever-so-slightly since hitting June peaks. People are still traveling – at least the ones who can still afford it – and as prices go down just a little bit many more could decide to hit the roads.
Costco seems to be anticipating more demand, which could be why it decided to implement this new change now. There is also speculation, however, that gas prices will jump right back to an upward trajectory in the coming weeks.
“July is typically the heaviest month for demand as more Americans hit the road, so this trend of easing prices could be short-lived,” says Andrew Gross, a spokesman for AAA, which tracks fuel prices across the United States.
Back in May, JPMorgan head of commodities research Natasha Kaneva warned that by August, the national average for a gallon of low-grade gasoline could hit $6.20.
Already in states like California, this is the average. Should the entire country hit that number as an average, then the cheapest grade of gas in the Golden State and other high-priced states could reach close to $10 a gallon.
According to Tamar Essner, a principal at Vectis Energy Partners, the only thing that even stands a chance at stopping gas prices from continuing to inflate with no end is the destruction of demand.
Costco is doing its part in New Jersey by limiting gas purchases only to members, but this will not be enough. Essner says that gas prices will need to increase “quite a bit higher” in order to stop this runaway train.
“What that magical number is I don’t know, because we are in unprecedented times in terms of having this build-up of demand post-COVID at the same time because of stimulus and higher disposable income,” Essner is quoted as saying.
For some reason, nobody wants to talk about how firing back up the refineries and installing more new drilling operations would also help to dramatically increase the available supply of gas, helping to drive down prices.
There is likewise almost no mention of the role that Wall Street greed and other financial corruption is playing in this whole debacle because apparently the global finance lords are untouchable.
If this topic interests you, you can find more stories covering it at SupplyChainWarning.com.
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