ExxonMobil, and CITGO to Increase Lubricant Prices
- ExxonMobil lubricant marketers got word that ExMo will be increasing finished lubricant prices by up to 15%, effective December 6, 2021. Marketers say they were advised that the adjustment is necessary due to the higher cost of raw materials and that the continuing escalation of these costs is driven by imbalances in the supply and demand of raw materials and production challenges some raw material suppliers are working through.
- CITGO advised its marketers of a general lubricant price increase of up to 15% on branded and unbranded finished lubricant products. The increase is effective December 9, 2021. The adjustment is said to be driven by the higher costs of raw materials and transportation.
Other Recent Increases
For those who may have missed it in the November 2nd issue of JobbersWorld, SOPUS advised its marketers of a price increase of up to 15% on finished lubricants, effective December 1, 2021. Marketers were informed that the adjustment is necessary due to increases in the costs of base oil, additives and other raw materials required to manufacturer and package lubricants, and significantly higher freight costs.
In the same issue, JobbersWorld also made note that Sinclair Lubricants will be implementing a price increase of up to 15% on finished lubricant products. That increase went into effect on December 1. As with the previous seven increases, Sinclair advised its marketers that this move is heavily influenced by uncontrollable events that have disrupted supply chains specific to base oils and additives to produce finished products.
It’s concerning to hear distributors say that while they are certainly challenged by the number and magnitude of lubricant price increases they have had to field this year, as well as other cost increases, allocation is currently among the most challenging issues they are dealing with. With some reportedly at 30% allocation, there is little wonder why.
According to many distributors JobbersWorld speaks with, they are scrambling to source enough product to meet the needs of existing customers. This means that while their sales may be growing due to selling more to the same customers as demand recovers from the pandemic, there is little opportunity to take on new business. And although tight supply of PCEO and HDEO additives were cited as the primary bottleneck for a good part of the year, they are now hearing that additives for gears, grease, rock drill oil and other niche products are further choking supply.