Jobbers World News
April 18, 2008

  • Breaking News - ExxonMobil Bumps Baseoil Prices
  • Change at the Top of Shell Lubes US
  • Shell Bumps Buyback Fees 2 Cents a Gallon

  • Breaking News - ExxonMobil Bumps Baseoil Prices

    Just when you thought the week was over, ExxonMobil announced today that effective on April 21, 2008 it will increase the bulk wholesale prices on lube basestocks by $0.20 a gallon on all grades.

    So come Monday morning you have to wonder what this means for the price of finished lubricants. Here we are, at the front end of pushing through the most recent round of price increases on finished lubes and base oil prices once again are moving up.

    Jobbers World suspects the next few weeks should be very interesting.

    Change at the Top of Shell Lubes US

    According to a number of marketers doing business with Shell, there was a significant change at the top of Shell's US lubricants management team over the past week. That change is the departure of Larry Cekella.

    Larry began his career with Texaco in 1983. He then joined Shell with the Alliance in 1998. Since that time, he has served in several senior roles at Shell including VP Sales in the US and General Manager Transport & Industry. Prior to his departure he was the general manager of the B2B lubricants business at Shell.

    Larry has joined Precision Fluids Inc., as President effective May 2008. Precision specializing in fluid equipment services.

    Shell has yet to announce a replacement for Larry.

    Shell Bumps Buyback Fees 2 Cents a Gallon

    Although buybacks fees have always been a very contentious issue for lubricant marketers, these fees have gained even more attention over the past year due to the escalating price of fuel. Whereas the buyback fees of last year may still seem fare with the majors today, marketers say they are not.

    In the views of most marketers JobberWorld speaks with, current buyback fees do not take into account the recent run-up in the price of fuel (let alone increases in labor costs, insurance and others). They say, whereas the price of diesel fuel alone has gone up more than 30% in the last year, their buyback fees have remained the same.

    Although marketers say Shell's recently announced $0.02 gallon increase in buyback fees is not enough to cover their increased cost of fuel to deliver buyback business, most say; it's a start and at least Shell appears to be listening to them when they say it cost more for fuel today than it did yesterday. At the same time, however, many feel if Shell, and other majors are really listening, they will realize a two cent a gallon increase is woefully short of what is really fare when you take into account the higher price of fuel.

    An in-depth analysis of this issue (both inbound and outbound transportation fuel costs) will be examined in the upcoming print edition of Jobbers World.


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