Membership fuel discounts worth it? Woolworths, Costco, 7-Eleven, and more rewards examined

Sky-high petrol prices have been a major cost of living stress for the past few years. Many Australians have been scrambling for ways to save, and member rewards programs have been a popular choice. After all, if your car insurance provider, grocery store, or local servo offers to shave dollars off your fuel ticket, then it's worth it...right?

Let’s break down how much these discounts actually save you – and figure out if there's a better way to save money at the pump.

A simple question with a (sort of) complicated answer. On average, Australians could be spending anywhere between $1,130 - $2,260 per year on fuel at current $2 per litre prices, depending on their car’s capacity and fuel efficiency, as well as how much they drive. 

According to the Australian Bureau of Statistics (ABS), the average Australian passenger vehicle used 11.1 litres of fuel per 100 km in 2020, with petrol standing out as the most common fuel type bought at the bump. Besides mileage, different types of passenger vehicles also have different fuel tank sizes, with smaller vehicles starting out at around 38 L capacity while larger SUVs and utes near the 82 L mark.

So if we assume the standard fuel price these days is roughly $2 per litre, we can get an idea of how expensive it is to refuel different types of cars. 

Average fuel costs for different classes of vehicle at $2 per litre*

*Assuming average kms travelled of 11,100 km per year (30.41 km per day), based on ABS statistics. Average tank volumes and capacities estimated from BudgetDirect.

In October 2023, the ABS reported the cost of automotive fuel in Australia jumped +7.2% over the spring quarter and +7.9% over the last year, mostly due to price jumps in petrol and diesel. Yikes.

Besides reducing mileage or upgrading to a fuel-efficient car or electric vehicle, the main way to save money on fuel is to find cheaper fuel prices. Many businesses offer fuel discounts as a membership perk, which is great news for creatures of shopping habit.

So what are the offers? Here’s a non-exhaustive list:

• Woolworths: 4-8c off per litre. Woollies offers 4c off per litre at participating fuel outlets if you spend $30 or more at Woolworths or Woolworths metro stores (T&Cs apply). You can combine with an extra 4c off (8c per litre discount total) if you spend $5 or more in-store at said outlets.
  
• Costco: 5-20c off per litre. If you become a Costco member ($60 per year for individual gold membership), you gain exclusive access to their competitively priced fuel stations. While fuel prices vary between locations, according to Fuel Price Australia they tend to run 5-20c cheaper than city and national averages. (Keep in mind Costco only offers specific fuel types, so they may not carry the kind you need for your vehicle).
  
• 7-Eleven: 1-30c or more per litre. 7-Eleven has adopted a rewards program where after six visits to their outlets (each with a purchase where you scan your rewards card), you could choose to ‘lock in’ the best fuel price you see on their app in your local area and refuel at said price for your 7th visit within seven days of activating the reward. This means your discount isn’t necessarily guaranteed, but if you happen to live near a low-priced pump, you could shave off cents big time. Conditions apply.

Several car insurance providers also offer standardised fuel discounts if you take out an eligible policy with them:

• RACQ Members: 4c off per litre. Only at Puma Energy and new Caltex petrol stations, T&Cs apply.
  
• RAA Members: 4c off per litre. Only with EG and Caltex Woolworths across SA and Broken Hill, T&Cs apply.
  
• RAC WA Members: 4c off per litre. Only at Puma Energy (becoming new Caltex) and Better Choice stations, T&Cs apply.

Keep in mind these discounts will often place fuel caps on their usage, varying between a maximum discounted 120-150 litres per refuel. Always read the terms and conditions or the PDS before signing up for a policy or rewards program.

Membership fuel discounts these days seem to fall around 4 cents per litre. If we use the average vehicle statistics and comparison costs from the first table, let’s see how much a price-cut of 4 cents could theoretically save you.

Fuel cost savings for average vehicles at $1.96 per litre*

It doesn’t seem to save a lot, but it could still be an extra $20-45 you don’t have to pay. These savings will still ultimately have to stack up against any costs sunk into becoming eligible for them, however (such as membership fees or grocery bills).

But what happens if you opt for the biggest savings possible? Let’s say you grab a rewards discount in the most ideal conditions: 20 cents off every time you refuel. How does this change the numbers?

Fuel cost savings for average vehicles at $1.80 per litre*

Those cents quickly add up over time, but the key point is that you will need to be consistent over long periods of time to see accumulated savings in fuel costs.

Ultimately any discount could technically save you money – and outrageous fuel prices are something worth saving on. However, it will depend on your circumstances whether these savings are ultimately worth it. 

If you drive a lot, bundling a service you already have or need with maximum rewards could save you worthwhile money – or perhaps the added discount will just edge today’s fuel prices within your allowance.

But if the cost of membership sinks more money in than you get back, member fuel discounts probably won’t serve your money saving goals. Either way is valid – so embrace what makes sense for you!

Start by creating a personalised budget to see where extra dollars could be put to good use. You can also track your fuel expenditure using one of these budgeting/savings apps.

Looking for more ways to save? Head over to our family finances hub for more expert guides.