Several major oil companies have recently notified U.S. customers of finished lubricant price increases that will take effect in late May, most citing increases in base oil and additives costs
- Shell will raise prices up to 4 percent on selected lubricants effective May 19.
- Chevron will hike prices by 3 to 6 percent on lubricating oils effective May 21.
- ConocoPhillips – now Phillips 66 – will increase prices by 3 to 5 percent on finished lubricant products, depending on product specific factors, effective May 24.
- Citgo will boost prices on list and customer specific prices by 3 to 6 percent effective with shipments on and after May 25. The change applies to Citgo, Mystik, Clarion, MileMaster branded and private label bulk and packaged finished lubricants, white oils and greases.
Most of the notification letters included a variation on Chevrons explanation to customers: This increase is being driven by the continuing rise in base oil and additive costs which impact the manufacturing of our products. Some referred more generally to increases in raw material costs.
Most of the notices indicated some prices would increase more or less than the general increase.
A marketing official with one distributor described pretty genuine acceptance of the latest round of price increases. It is very apparent if retail fuel [pricing] stays elevated, the [lubricant] price increases go through so much smoother, this source said. The official pointed out that the increased price differential between premium and private label brands seemed to be affecting the market. Were seeing an increased activity level and interest in private labels.
A sales official with another distributor agreed that base oil prices, driven by the tightening of the supply against demand, have driven this latest round of increases.
A territory manager with a distributor suggested that in addition to increases in base oil prices, natural gas could also be a factor contributing to this latest round of increases. Natural gas is way down, and therefore the corporate earnings are going to be hampered by that, this source noted.
Last year saw several rounds of finished lube price increases that went into effect from early February through early March, mid-April through early May, mid-June through early July, and throughout September.