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Costco taking
gas battle to Kona

The discounter also
is considering opening
a Maui station

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By Rob Perez
Star-Bulletin

Costco Wholesale plans to open its first gas station on the neighbor islands in the spring, bringing its low-pricing, high-volume marketing approach to the Big Island.

It also is considering opening pumps at its Maui warehouse store in Kahalui.

The Kona store will be the second gas facility Costco has in Hawaii. It opened an eight-pump operation at its new Waipio store in the summer and, with prices about 5 to 15 cents below many other stations, lures scores of motorists daily.

The discounter's stores and gas operations are open to members only.

Costco officials locally said a 12-pump facility is tentatively set to open in late March at the company's store in Kona. Construction is scheduled to begin at the end of January.

An executive at the Maui store said the company is considering opening gas operations there, but plans have not been completed. Among other things being considered is whether space constraints will permit a gas operation.

Costco's aggressive pricing practices are bound to rattle the neighbor island markets, which generally are the most expensive in the country for gasoline.

In Kona, regular unleaded gas sells for more than $2.20 a gallon -- roughly 30 cents more than the going rate on Oahu.

AAA earlier this week said Hawaii had the highest regular unleaded gas prices in the country at an average of $2.01 a gallon. The national average is $1.50, AAA said.

The opening of Costco's Waipio store has hurt business at stations on Oahu and has forced some dealers to lower what they say are already puny profit margins.