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Jobbers World News
July 28, 2009

  • Chevron Jumps in With A Price Increase
  • Shell Also Announces a Price Increase
  • Warren Oil is Tracing Quality
  • JobbersWorld Welcomes Your Thoughts and Opinions on Quality, and Publicly Asks ILMA and API to Respond
  • Contact Us With Your News

  • Chevron Jumps in With A Price Increase

    Chevron advised its marketers on Friday of last week that it's increasing its lubricant prices by 6 to 9% effective September 14, 2009.

    As with virtually all price increases, Chevron attributes this increase to the recent rise in raw material costs.

    Marketers say they are limited to purchase no more than 120% of their average monthly volume for the past three months at the current price.


    Shell Also Announces a Price Increase

    According to a number of marketers JobbersWorld has spoken with over the past few days, Shell has advised them of a 6% price increase on lubricants effective in Mid-September.


    Warren Oil is Tracing Quality

    Warren Oil Company, Inc in Dunn, NC is now advising customers it will begin using tracers in several of its lube oils as early as August, 2009. The purpose of this program is to control quality, to determine whose oil is in a customer's tank and to deter commingling.

    According to Irvin Warren, President and C.E.O. of Warren Oil Company, "We have recently become aware that our Warren, Coastal and Lubriguard Products are in some instances being commingled at distributor plants with other brands of oils, therefore compromising our products, overall quality, physical characteristics, and integrity. Therefore, a tracer will be added to Warren, Coastal, and Lubriguard bulk products prior to shipping."

    Warren says they face two significant challenges in bulk lubricant sales.

    • Lesser quality bulk products commingled in its customer tanks by suppliers who do not adhere to the same standards of quality as Warren Oil Company.

    • Bulk products sold as, or substituted for a major brand.

    To the second point, Irvin Warren says, it knows its "quality is equal to or exceeds the majors so we do not worry of a failure and neither should the majors. We are concerned for the majors that not all independents produce product equal to ours and could cause grave problems if commingled with a major. We are also concerned that the customer is paying a higher price than necessary when the product has been commingled."

    Warren goes on to say, "It is the responsibility of the distributor to make certain he supplies his customer with an identifiable product meeting O.E.M. requirements. A consumer nor the distributor should not purchase for resale a house brand, fighting grade brand, or generic brand unless the physical characteristics of the oil are presented and proven that they will meet O.E.M. specifications."

    As an independent compound blender of lube oils, Warren says it knows "we can produce a product that satisfies all the requirements of API and the manufacturers of the equipment. We are totally dedicated to producing products that will perform the same as Shell, Pennzoil, Castrol or any major. Warren Oil Company enjoys competing with the majors but we know we must have a superior product if we are to endure long term. We do not and will not align ourselves with manufacturers who use less additive treat than is required or an additive package that has never been tested, qualified, or certified. The difference in our cost and that of a major is that reflected by savings in labor, overhead, efficiencies, no national advertising program, and the fact that the C.E.O. of this company can still drive a forklift."

    Irvin Warren told JobbersWorld "If an independent manufacturer is to survive long term, it must produce quality product, even using the majors as a standard. I believe the majors and reputable independent manufacturers can and will co-exist as long as the independents produce quality products. Finally, manufacturers cheating or compromising formulas will experience temporary profit and growth but will ultimately end in failure like many who are not in business today."


    JobbersWorld Welcomes Your Thoughts and Opinions on Quality, and Publicly Asks ILMA and API to Respond

    First it was Shell announcing it's clamping down on quality by using tracers and more rigorous testing to assure the integrity of its products in the installer class of trade. Next, it was Valvoline advising its marketers the company will no longer allow repackaging. This is a move many feel is also about assuring product integrity. Now we have Warren Oil saying it will use tracers (as early as August) to assure its products are not commingled. And all of this taking place within the past 30 days.

    Aside from the thought that now might be a good time to invest in companies that offer lubricant tracers, JobbersWorld ask its readers to send us your thoughts and comments on the quality of lubricants in the market place.

    • Is there a real problem with poor quality lubricants in the marketplace?
    • Is API, ILMA, or anyone doing something about it?
    • How likely is it that if there are some bad apples in the independent lubricant manufacturer basket, they will spoil the whole bunch?
    • Are low quality/off spec lubricants a serious threat to legitimate products and suppliers?
    • If you believe there is a problem with quality, what products should be first to look at and why?
    • If there is a quality problem in the marketplace, what can, and should be done to address it?

    Also... JobbersWorld publicly asks the Independent Lubricant Manufacturers Association (ILMA) and the American Petroleum Institute (API), if it feels low quality and/or off-spec lubricants are a problem in the market place, and if so, how serious is the problem?

    Please e-mail me directly with your comments at tom_glenn@jobbersworld.com.


    Contact Us With Your News

    JobbersWorld is all about issues impacting lubricant distributors. You are our primary audience and you are the ones we need to hear from. What's on your mind? What issues would you like to see us tackle? And what news would you like others to know about?

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    We reach out to nearly 10,000 participants in the lubricant distribution supply chain once or twice a week (depending on what's NEWS) and we tell it like it is.

    Please contact us via e-mail at tom_glenn@jobbersworld.com, or direct at 732-494-0405.

    Thank you


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