Rising Costs of Raw Materials Spur Second Price Increase
Last week we published a notification alerting our customers to a pending 6% increase in price based on the rising cost of raw materials. Over the past week, however, most major oil suppliers announced an unexpected additional price increase from 6% up to 14% on all lubricating oils and greases. This additional spike, based on the cost of raw materials are leaving lubricant manufacturers in a pricing quandary. As a result of this new announcement, the 6% price increase scheduled for May 6th will now be 14%, effective May 29th, 2019. As a service to our customers, we are extending the period leading up to the price increase by an additional few days to June 3rd, 2019.
Get Ahead of the Double Dip Price Increase
With increases in the cost of raw materials, rising freight costs, and overall market fluctuations, we would like to strongly encourage our customers to place orders for finished lubricants and greases as soon as possible to take advantage of current pricing. An increase in demand is expected, so contact an SCL consultant as soon as possible to get ahead of the June 3rd price increase. An SCL consultant can also assist you in exploring other ways to offset the impact of these pending price increases, such as through extended drain intervals, through oil analysis, and by choosing more fuel efficient products.
Below you will find links to the secondary price increase letters from some of our major finished lubricant manufacturers, as well as our own official price increase notification:
- Castrol – 5/20/19 Price Increase
- Chevron Lubricating Oils and Greases – 5/29/19 Price Increase
- Shell Finished Lubricants – 5/29/19 Price Increase
- Phillips 66 Finished Lubricants – 5/29/19 Price Increase
- Exxon/Mobil Vehicle, Industrial, Marine & Aviation Lubricants – 5/29/19 Price Increase
- Petro Canada Lubricants – 5/29/19 Price Increase
- Valvoline Branded Lubricants – 6/1/19 Price Increase
- SCL – 6/3/19 Price Increase
- Fuchs Lubricants – 6/15/19 Price Increase
Understanding the Upcoming Price Increase
For most suppliers, both of the price increases will become effective on Wednesday, May 29, 2019, in an effort to lessen the administrative burden of enforcing two separate price increases. SCL’s price increase will be extended an additional few days to June 3rd, 2019. You can learn more about the upcoming price increase by visiting JobbersWorld.com.
As part of the Shell Lubricants 2019 US Market Conditions Report, we have included this helpful illustration that breaks down the lubricant cost component by percentage for each barrel of oil – Base oil, additives, transportation costs, packaging, blending and filling.
Contact an SCL Consultant Today
As a solutions and logistics provider for a wide range of industry sectors, we recognize that this double dip price increase will impact your business in one way or another. We are committed to providing our customers with the highest quality products and outstanding customer service at competitive pricing, so we will make every effort possible to help offset as much of that impact as we can. We thank you for your continued business and we appreciate the opportunity to serve you. If you have any questions or would like more information on how to prepare for this price increase, contact an SCL consultant today.