Jobbers World News
April 27, 2010

  • Amalie Announces Price Increase
  • Advanced Lubrication Specialties Also Announces an Increase
  • PQIA Releases Results on Private Label Engine Oils
  • Shell and Penske Together Again
  • Contact Us With Your News

  • Amalie Announces Price Increase

    Amalie advised its marketers it will increase its lubricant prices by thirty-two cents ($0.32) and forty-eight cents ($0.48) per gallon. This increase is effective May 17, 2010. Also effective May 17th, the price for Amalie grease will reportedly increase by $0.04 to $0.06 a pound.

    Advanced Lubrication Specialties Also Announces an Increase

    Advanced Lubrication Specialties announced it will increase the price of its finished lubricants $0.15 to $0.25 a gallon effective April 24, 2010. The company advised its marketers that this will not be an across the board increase, but most are in the range of $0.15 to $0.25 a gallon.

    According to what marketers have been told, the ALS increase is in response to the escalation in the cost of API Group I and II, and Naphthenic base oils that occurred in March.

    PQIA Releases Results on Private Label Engine Oils

    The Petroleum Quality Institute of America (PQIA) recently completed its second round of testing on various brands of engine oil. This second round includes 10 samples of private label engine oil. According to PQIA, the "Test Results for Private Label Look Good -"BUT, ALARMS ARE TRIPPED FOR ONE"

    According to PQIA's website, all but one of the private label samples tested show data indicative of what one would expect to see for an API SM GF-4 engine oil. The labeling and test results for one brand tested, however, gives cause for concern.

    Shell and Penske Together Again

    Shell signed a multi-year deal to sponsor Penske Racing in the NASCAR Sprint Cup, Nationwide Series, and IndyCar Series. As a result, Shell will be Penske's official fuel and motor oil supplier starting in 2011.

    In JobbersWorld's view, this deal has the potential to shake things up between Shell, Mobil, and Chevron in the lubricants business. To start, although Mobil 1 will continue as the official NASCAR oil, it will not be on Penske cars. Instead, starting in 2011, it will be Shell and Pennzoil logos enjoying the high visibility of Penske cars. This will be a win-win for both Penske and Shell. Penske wins because it gets millions for racing venues. Shell wins because it gets tremendous exposure/advertising mileage.

    But in addition to the advertising exposure, Shell is also in a position to potentially benefit from Penske's other business-to-business relationships. Specifically these relationships speak to Penske owned dealerships (Penske Automotive Group) selling Honda, Porsche, Mercedes, and others where ExxonMobil has a strong position as an approved supplier of genuine oil, and bulk. Some wonder if Mobil's position at these dealerships may weaken as Shell's relationship with Penske strengthens. If it does, Shell could likely be the beneficiary of a significant increase in lubricant sales volume.

    Similarly, some also wonder if Chevron will retain its business with Penske Truck Leasing when its contract to supply Penske with lubricants expires.

    With that said, it's no wonder Shell refers to the deal as being a "multi-year cross business alliance." In addition, it's easy to understand why many are saying the rewards are potentially high for both Penske and Shell and the deal is "anything but a one way street."

    For NASCAR's take on the story, see link below.

    Contact Us With Your News

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