ExxonMobil Hikes Lube Prices


ExxonMobil notified U.S. customers last week that it will raise finished lubricant pricesbetween 5 percent and 9 percent effective Oct. 1.

Other leading lubricant marketers have not followed – at least not yet – but several independent suppliers have reportedly stepped out with their own increases.

The U.S. market has already undergone two rounds of finished lubricant price hikes this year, and sources said resistance to further increases is building.

I think people are getting fed up at this point, said an official with a Midwestern lube distributor, who spoke on condition that he not be identified. We serve end-users like installers and trucking companies. Theyve already borne some steep increases, and now they see [lubricant] prices going up when gasoline [prices are] going down. Thats hard for them to swallow.

ExxonMobil announced its increases in an Aug. 21 letter to distributors, which Lube Report obtained. It said the increase applies to conventional and unconventional lubricants and greases, whether sold under the Exxon or Mobil brands or unbranded. It also warned that additional markups are likely for heavy duty engine oils meeting the new API CJ-4 specification, but said they will be announced later.

The big lubricant suppliers usually change prices as a group, though not always. Most raised prices near the end of the first quarter and again during the summer.

Market sources said other big marketers had not announced changes by the end of business yesterday, but added that several smaller independents have announced increases. Such actions would be unusual because those companies usually do not move until after their bigger competitors. None of the companies mentioned could be reached for comment yesterday.

Distributors speculated that further price hikes could erode sales for more expensive lubricants.

After all the increases weve seen, youve got some customers that reach their breaking point, a Northeast distributor said. They say, Im not going to pay any more. They switch to a cheaper product, and thats when you get this trickling down to lower-priced oils.

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