API Snuffs Out GF-2


The American Petroleum Institute will stop licensing GF-2passenger car engineoils at the end of this month, effectively forcing nearly all marketers who have not done so to switch to GF-3 formulations.

GF-3 oils hit the market last summer, afterASTM approvedthe specification. But API, which administers the Engine Oil Licensing and Certification System, continued licensing GF-2 products, ostensibly to give smaller independent marketers time to complete the testing required to obtain GF-3 licenses.

Some independents said the grace period allowed them a temporary cost advantage over major oil companies, which generally made early conversions to more expensive GF-3 formulations. GF-3 costs more because higher additive levels or premium base oils – or both – are generally needed to meet its volatility, oxidative stability and fuel economy requirements. Auto manufacturers recommend GF-3 oils in model year 2002 cars but GF-2 suffices in older engines.

Blenders interviewed this week said that, as a practical matter, that window ends when companies are no longer permitted to display APIs starburst symbol on motor oil containers.

Were making the switch, said Butch Sears, laboratory technician for Third Coast Industries, of Friendswood, Texas. If youre selling motor oil in this country, everyone wants to see that symbol. It costs a bit more but its just one of those things you have to deal with.

Third Coast actually exports much of its product to markets that use older categories of motor oil. The company is completely changing to GF-3, Sears said, for logistical reasons and because it expects GF-2 additive packs to become more scarce.

Many in the lubricants industry had initially expressed hopes that GF-3, because it represented a performance upgrade, would improve margins for marketers. Companies interviewed for this article said they do not expect that wish to be realized.

I can almost guarantee it will not, said Jeff Abel, of The United Oil Co., in Baltimore, Md. Competition is too tight for anyone to increase margins. Companies will pass on the additional cost of GF-3 because they need to maintain a minimal margin. But I dont see them getting anything extra out of it. Its just raised the bar and everyone has to meet it.

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