The price of motor oil in the United States has reached a historic record of $12.45 per gallon due to global shortages and the impact of sanctions. This price increase is attributed to the rising cost of base oil used in full synthetic motor oil and disruptions in the supply chain of lubricant products.
Shortages in Stores and Rationing
According to received information, the Costco wholesale chain has raised the price of 10 quarts of full synthetic motor oil to $57.99 and limited each customer's purchase to one unit. This is while the similar price last year was around $30. The Walmart website has also reported that the inventory of several brands of motor oil has significantly decreased, and the company is working closely with its suppliers to provide products at reasonable prices.
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Factors Affecting Price Increase and Supply
The shortage of motor oil in America is due to various reasons, including disruptions caused by attacks on liquefied natural gas facilities in Qatar and military tensions in the Strait of Hormuz. These issues have created problems in the transportation and supply of the base oil needed for motor oil production in other countries. Mauricio Quezada, CEO of Jiffy Lube, has pointed out that these shortages may continue in the future. Jiffy Lube, which was previously a subsidiary of Shell, continues to source motor oil from Pennzoil Shell.
While some oil change chains like Valvoline are not suffering from product shortages due to reliable suppliers, they have instead raised the price of oil changes by $5 to $7. Lori Fles, CEO of Valvoline, announced at a conference that prices may rise even higher and added that it would take four to six months to return to normal conditions.
Ultimately, the situation is more challenging for independent stores and blending companies that do not have long-term supply agreements. Holly Alfano, CEO of the Independent Lubricant Manufacturers Association, stated that many blending companies are currently facing difficulties due to supplier rationing. Meanwhile, automakers are also seeking new motor oil blends to reduce supply shortages.
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