Numerous major oil companies have informed customers of finished lubricant price increases over the last several weeks, with several citing rising raw material costs as a key factor.
Marketers late last year and early this year had expressed concern to Lube Report about majors price decreases not providing sufficient relief or matching price cuts by independents, in light of the then-dropping crude and base oil prices. When crude went down to $35 a gallon, we were not given by the majors their full line decrease – they were keeping a lot on their table at that point, an official with a distributor told Lube Report. Now when the markets going up, theyre of course taking some back, but theyre still making out on the deal.
This source doesnt foresee another round of increases from the majors unless hurricanes or other major events impact the crude or base oil market. We feel the [finished lubes] market will do the increase now, but we dont think therell be another increase this time if crude is continuing to stay where it is, this official stated.
Citgo on Aug. 14 informed customers it would raise prices by 6 to 9 percent on list and customer specific prices effective with shipments occurring on or after Sept. 28 for Citgo, Mystik and private label brands, including all bulk and package styles.
Citgo also informed Clarion brand customers Aug. 13 that it would increase prices effective Sept. 15 by 30 cents per gallon on food grade, industrial and technical grade white oils, and by 6 cents per pound on grease. Synthetic industrial oil and fire resistant fluid prices are unchanged, the company stated in its notice.
ConocoPhillips told customers it would increase prices for most finished lubricant products, including greases, by 6 to 9 percent depending on product-specific factors. The key driver of this increase is the higher cost of raw material components utilized in the manufacture of our product lines. These cost increases have occurred despite our best efforts to limit their impact on our operations, the company noted in its Aug. 7 letter.
ExxonMobil on Aug. 7 notified customers it would raise prices by 5 to 7 percent for ExxonMobil branded and unbranded lubricants and greases effective Sept. 15. Different price treatment may apply to selected products, the company stated in its letter.
On Aug. 1 BP Lubricants informed customers it would increase the price on most passenger car, commercial, industrial and ancillary products in all package types up to 6 percent effective Oct. 5.
Chevron told customers it would increase prices on lubricating oils, gear lubes and greases by an average of 6 to 9 percent. In some cases, specific products may increase in amounts that are outside of the general increase, the companys July 27 notice stated. This increase is being driven by the recent rise in raw materials costs, which impact the manufacturing and transportation of our lubricants and greases, the company noted in its letter.
Shell notified customers of plans to increase prices on average 6 percent effective Sept. 15. In its July 20 letter, Shell noted the adjustment is due to increasing costs of raw materials used in the production and delivery of our products. In certain instances, Shell stated in its notice, specific products may change in amounts falling outside the general increase.
Petro-Canada recently informed customers it would increase book and area-wide pricing for its lubricants, fluids and greases by 36 cents per gallon and 5 cents per pound for all shipments on or after Aug. 31 in all packages sizes and warehouses. Its increase doesnt include Purity FG white oils or process oils, which had a previous increase effective Aug. 3.
Safety-Kleen told customers July 21 it would raise prices on all its finished lubricants products by 40 cents per gallon effective on all shipments made on or after Aug. 15, 2009.
An official with a lubricant blender told Lube Report that rising base oil prices would seem the most likely reason for the round of finished lube price increases. If base oil guys get more money, then the guys in the finished lubes have to make more money too or they get in trouble – they have to remain profitable, this official noted.