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06-13-2006 Price increase July 1, 2006
Rising Crude Oil Prices Force Lubricant Prices Upward
With the price for a barrel of crude oil topping $70 and continually setting record highs, gasoline prices have soared to a national average of $2.92 a gallon. The volatile crude oil market affects consumers and businesses all across the world. People adjust their driving habits and businesses are forced to charge more for their products in order to offset the increased costs of manufacturing and shipment.
The lubricants industry is directly affected by the volatility of the crude oil market. Raw materials, packaging materials and shipping prices all rise along with barrels of crude oil. These rising prices have affected every lubricant company in the industry. Each has been forced to increase lubricant prices to compensate, many more than once. In fact, major motor oil manufacturers recently implemented an additional 4 to 8 percent price increase for bulk and packaged lubricants.
According to independent consulting firm Petroleum Trends International, the price increases translated into $0.28 a gallon for bulk lubricants and $0.64 a gallon for bulk and packaged synthetic lubricants.
Due to these ever-increasing prices, AMSOIL is forced to implement a minimal price adjustment effective July 1. This includes the MLM, Retail on the Shelf and Commercial programs in the United States, Canada and Puerto Rico.
Rising prices of consumer products are a fact of life. Prices have consistently risen through the years even during periods of stable crude oil prices. Consumers may recall a time when they received a lot more for their dollar. Prices for consumer goods often rise when the cost of producing those goods increases, and every product on the market is susceptible to these price increases.
The table below compares the price increases experienced by common consumer products, competing motor oils and the original AMSOIL synthetic motor oil, AMO 10W-40, over the past 30 years. Based on case (AMO-01) pricing, the Dealer price for a quart of AMO was $3.42 in 1976. Effective July 1, the price will be $5.20, representing a 52 percent increase over 30 years. Even with the latest price adjustment, AMSOIL lubricant price increases have remained far lower than the price increases of other common consumer products, including competing motor oils. As seen in the table below, the price for a quart of Quaker State 10W- 30 motor oil has jumped 288 percent since 1976, a rate of increase 51⁄2 times higher than AMSOIL AMO.
The price for a quart of Valvoline 10W-40 motor oil jumped 414 percent in the same time period, a rate of increase almost eight times higher than AMSOIL AMO. Even with a minimal price adjustment, AMSOIL synthetic lubricants remain the best and most cost-effective choice on the market, saving customers money through reduced wear and maintenance, extended drain intervals and increased fuel efficiency. AMSOIL synthetic motor oils offer drain intervals up to 11 times longer than conventional motor oils in normal service, reducing motor oil expenses. AMSOIL synthetic lubricants also effectively reduce friction and prevent viscosity increase, both of which contribute to improved fuel efficiency and less money spent at the pump.
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