Need to Know
While the sharp drop in lubricant demand and the extraordinary measures companies took to maintain business continuity while working through the pandemic in 2020 was one for the record books, 2021 will also go down in history as being unlike any we have seen before. Large and ongoing increases affected the cost of all raw materials required to manufacture and package lubricants. Supply chains were rocked on a global level. Transportation and labor costs skyrocketed. And deep allocations were enacted on finished lubricants due to a shortage of additives.
For many, the number of lubricant price increases in 2021 is one of the most remarkable events of the year. Although not all blenders moved prices up the same number of times, many announced eight lubricant price increases in 2021. To put this in perspective, consider that over the 20 years Petroleum Trends has been recording lubricant price increases, on average there have been two price increases a year. The closest number to the increases of 2021 occurred in 2011 when four took effect.
The first lubricant price increase in 2021 occurred in mid-January and bumped lubricant prices up by 10%-15%. This increase came in response to a base oil move in December 2020. But before many lubricant marketers implemented the first lubricant price increase, there was another base oil increase announced in mid-January.