Are Lubricant Price Increases Unique?
With the number of price increases we have seen so far in finished lubricants this year, one has to wonder if the frequency of these increases are unique to our industry or is it occurring in other industries as well. The short answer is that, with some exceptions, similar dynamics are seen in a wide range of consumer products, and what we are witnessing in the lubricants business today is not particularly exceptional. Evidence of this can be seen in the Consumer Price Index (CPI).
The CPI is an index reported by the US Bureau of Labor Statistics (BLS) that measures changes in prices over time for a market basket of selected products and services. Before seasonal adjustment, the index rose by 2.5% over the past twelve months. Whereas JobbersWorld will peel a few layers off the CPI and layer in data from the Producer Price Index in our next issue to reveal more, it’s interesting to start with a look back at the price of products over the last 50 years. As shown, it’s clear that although the price of conventional motor oils on retail shelves have certainly increased, the increase over time is not exceptional. In fact, the percent change in retail price of conventional motor oils are on par with other petroleum product and well below crude oil. It’s also clear that while many complain about increases, there is one line item on the table below where big increases would be welcomed.
Coming up in the next issue of JobbersWorld… Making dollars and sense of the CPI and PPI in the lubricants business.
|Federal debt ($billion)||348||21,099||5,962.9|
|Crude oil, bbl||3.18||66.00||1,975.5|
|Pack of Cigarettes||0.33||6.37||1,830.3|
|Diesel Fuel ($/gal)||0.31||3.28||958.1|
|Quart of Conventional Motor Oil||0.39||3.97||917.9|
|First class stamp||0.05||0.50||900.0|
|Price of a house||25,400||238,700||839.8|
|Cup of Coffee||0.15||1.38||820.0|
a- As of June 15, 2018