AMSOIL just had a cost adjustment in May. Why are prices rising again?
AMSOIL has already received multiple, significant price increases from our suppliers in a short amount of time. The exceptional events from the last year have led to a substantial increase in the cost of raw materials used to produce lubricants. As a result, many lubricant manufacturers have already announced three price increases in 2021. With fourth and fifth rounds predicted in the months ahead. AMSOIL is facing only their second price increase of the year. AMSOIL delayed adjusting prices until May rather than their usual timing of April to account for as many increases as possible. Unfortunately, raw materials costs have continued to rise quickly, forcing them to make another price adjustment.
What is triggering these significant cost increases?
Various factors have contributed to the rise in costs for raw ingredients. In 2020, crude oil prices began steadily climbing upward, and therefore, base oil prices rose steadily with them. In addition, the COVID-19 virus created a sharp decline in demand for gasoline and jet fuel, prompting cutbacks in production for the feed for base oils. To complex supply issues even more, the historic ice blizzard that hit Texas in February on a temporary basis shut down several refineries and interrupted lubricant additive production facilities for a prolonged amount of time. And consequently, raw materials are in great demand and short quantity. The discrepancies in supply and demand, weather related shutdowns and lingering issues from the virus have combined to create an exceptional sequence of raw materials price rises. All from the base oils and additives used to create lubricants to the cardboard as well as plastic used to create lubricant packaging have been adversely affected.
Why didn’t AMSOIL offer more notice about this price change?
Raw materials prices have risen too rapidly to permit for any additional notification to accounts. AMSOIL does not like the short notice either, but the rapid and substantial nature of these cost increases leave them no choice.