In this Issue of Jobbers World Online News Briefs
  • Castrol first to move price in 2006.
  • ExxonMobil is second to move...and an interesting move it is
  • SOPUS takes off the gloves...
  • Les Rudnick joins Ultrachem

  • Castrol first to move price in 2006.

    According to Jobbers World's sources, Castrol is the first major to increase the price of its finished lubricants in 2006. Taking effect on March 1, 2006, Castrol will reportedly increase the price of all Castrol GTX PCEO by $0.28 a gallon on bulk and $0.36 a gallon on packaged product. Its mid-tier PCEOs (including GTX High Mileage, Startup, and Syntec Blend) will reportedly increase $0.36 and $0.44 a gallon for bulk and packaged, respectively. And according to Jobbers Worlds sources, Castrol will bump the price of its synthetic PCEO up by $0.64 a gallon for both bulk and packaged product.

    In addition to increasing the price of its consumer automotive lubricants, Castrol reportedly will also increase the price of its commercial and industrial lubricants in March. Its conventional C&I lubricants are reportedly moving up $0.28 a gallon, and its synthetic C&I $0.48 a gallon.

    ExxonMobil is second to move...and an interesting move it is

    Within only one day of Castrol announcing an increase in the price of its lubricants, ExxonMobil followed with its price increase. According to Jobbers World’s sources, effective March 1, ExMo will increase the price of its conventional branded and unbranded lubricants by an average of 8%. Its synthetic lubricant prices are reportedly going up 4%.

    Although ExMo's announcement would appear on face value to be just another form letter about price increases, it gets more interesting when one peels another layer off the onion to look at some of the detail. The first "that's interesting" starts with the understanding that ExMo had previously informed its marketers that Exxon Superfo will no longer be made available to them in bulk. ExMo reportedly made a decision to drop Superflo from its lineup at the first of the year. This means that customers formerly buying Superflo in bulk will now be switched over to Mobil PCEO. For most this might sound like a good deal if all things remain equal on pricing. But they didn't. According to what Jobbers World is hearing, ExMo is now offering it distributor’s two choices when they buy Mobil PCEO.

    The choices are to buy in Mobil with and without "options." It short Jobbers World is told, "with options" means the purchase includes certain programs historically bundled with the product. These programs are debundled from the offering when the product is purchased by a marketer without options. Now for the second "that's interesting."

    From what Jobbers World has heard on the street, ExMo's price for Mobil PCEO with options will increase by $0.15 a gallon as of March 1, 2006. The price for the same product without options will be bumped up by $0.40 a gallon.

    This means ExMo is now making the value of the options more visible and maybe more importantly, it's increasing the price of the Mobil without options replacement for bulk Superflo in such a way that buying with the options appears to be a good deal for marketers and buying without the options is a good deal for ExMo's bottom line.

    SOPUS takes off the gloves...

    According to a number of industry sources, Shell Oil Products recently restructured it lubricant price schedule. Without mincing words, what Jobbers World is hearing is that prices for Pennzoil and Quaker State will likely be more competitive in 2006.

    Similiar to ExMo's approach of offering a with and without options choice, SOPUS has reportedly put a value on some of the program options it typically bundles with its lubricants. Although unconfirmed by SOPUS, the company is reportedly now prepared to back out some program costs in an effort to reduce its sticker price and regain some of the market share it reportedly lost over the past few years.

    Again, although unconfirmed by SOPUS, word on the street is that Pennzoil and Quaker State will be priced more competitively this year than last. And if the street is right, we can expect to see a leaner SOPUS who is willing and ready to fight for share with prices that are $0.30 to $0.60 a gallon more competitive this year than last. In fact, some marketers say if SOPUS takes a pass on the next round of price increases the distance between SOPUS and its competitors will be even greater.

    SOPUS is reportedly in a position to make this move due to its efforts over the past two years to reduce costs. These efforts include improved supply chain management, SKU rationalization, elimination of selected direct delivery operations, and other cost reduction efforts.

    Les Rudnick joins Ultrachem

    Ultrachem Inc. announced that Les Rudnick has been appointed Technical Director. Les formerly a faculty member at The Pennsylvania State University, University Park, will be located at Ultrachem's facility in New Castle, Delaware.

    Les has over 20 years of industrial experience with petroleum, lubricant and lubricant additive companies. He has authored or edited over 85 journal articles, book chapters and books, including Synthetic Lubricants and High Performance Functional Fluids, Second Edition, Lubricant Additives: Chemistry and Applications, and the newly published Synthetics, Mineral Oils and Bio-Based Lubricants: Chemistry and Technology. Dr. Rudnick also serves on the editorial board of the Journal of Synthetic Lubrication.

    Established in 1965, Ultrachem is one of the oldest specialty lubricants compounders. Privately held since 1984 by a group of key employees, Ultrachem has built an impressive reputation as a supplier of the OEM and industrial maintenance markets.

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