Lubricant Price Adjustments
The first quarter of 2023 was extraordinarily quiet in terms of announced price changes in base oils, additives and finished lubricants. Importantly, however, while JobbersWorld is aware of only two officially announced decreases in the price of finished lubricants in Q1 2023, prices have been trending down (significantly for some products) over the past four months.
The downward pressure on finished lubricant prices is due to soft demand, and what many distributors say is very aggressive pricing by some majors. It is believed some majors are dropping prices to regain the market share lost when they ran low, or simply out of product last year due to interruptions in additive supply. There was considerable supplier switching during that time as a result of allocation and stock outs for some major brands. This was particularly notable for HDEO, PCMO, and some gear oils.
Interestingly, marketers say that majors engaged in such discounting to claw back market share are focusing the price reductions on their second tier HDEOs and PCMOs rather than their marquee labels.
Pressure on finished lubricant prices intensified following announcements by base oil producers late March and into April that they were decreasing posted prices. While the base oil price decrease offers blenders relief, it’s important to consider that margins have compressed significantly this year due to the intensity of competition. In addition, inventories are high as a result of soft demand.
The following is a summary of the adjustments.
Lubricant Price Adjustments 2023
- Chevron announced a general posted price decrease on lubricants of up to 8%, effective January 12, 2023. While the decrease applies to many of its lubricants, it excludes automotive gear oils, transmission fluids, industrial gear lubricants, and coolant and fuel additives. In addition, while the posted price of many of Chevron’s lubricants will decrease, marketers were advised that the posted price of Chevron’s greases will increase by up to 17%, effective February 13, 2023. The increase is said to be due to higher costs on raw materials, packaging, and overall supply disruptions.
- CITGO announced a general posted price decrease on select lubricants of up to 8%. The decrease went into effect January 13, 2023. The adjustment applies to most of the company’s lubricants, including conventional HDEO and PCMO, and the majority of its hydraulic oils, THF, and others. The price of CITGO grease and selected specialty lubricants will, however, increase by up to 17%. The increase applies to synthetic industrial lubricants, full synthetic HDEO and PCMO, Clarion and fire-resistant lubricants. The upward adjustments are effective February 13, 2023. CITGO attributes the need for the increases to escalations in component costs and continued supply constraints.
The following table provides a summary lubricant price adjustments in 2022.
In addition to attributing the need for the price adjustments to ongoing increases in the cost for raw materials, and significant increases in the cost of packaging and freight, a number of lubricant manufacturers advised customers that they may experience extended lead times and order delays due to industry-wide shortages.
The following table provides a summary lubricant price adjustments in 2021.
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