Big box retailer Costco is looking to go against Woolworths and Coles in the discount petrol market.

Reported by The Sydney Morning Herald, Costco is awaiting for council approval after requesting for room to build a petrol station at a second Sydney site and at its first store in Brisbane.

''If you can sell vegemite at a cheaper price on a full pallet, or a kilo tub, why can't we sell gasoline?'' Costco's Australian managing director, Patrick Noone, told SMH.

The company already offers discounted fuel in the US and hopes to bring direct competition to Coles and Woolworths who offer discounts varying between 4 cents to 8 cents per litre through their docket schemes.

It plans to open as many as 20 petrol outlets in Australia.