4WD
$50 site donor 2023
Think the ADbase is touted as Grp3+ … so up until a few days ago that didn’t explain the price delta …
Now they are all raising PVL prices …
Valvoline’s Lubricant Product Line to be Acquired by Saudi Aramco?
- Thread starter Danh
- Start date
Now they are all raising PVL prices …
Base oil costs matter little in package good product prices.
Really they’re probably catching the pricing up from the last ~18 months of price increases. Especially on anything in a plastic container, as the bottles have had the most rocky pricing and availability.
Considering on the wholesale side, we’ve had approximately 12 price increases - in some cases 14 - in 18 months. The retail side hasn’t seen that fallout completely yet. So there’s still going to be some price increases on the retail level. And you’re going to see some catch up with the oem brands that are quarterly bench marked at least through the beginning of 2023.
Adnoc based Dexos 1 Gen 2 0w20 or 5w30 used to be sub $5 a gallon in 2020. Now it’s way north of $10.
4WD
$50 site donor 2023
Well, yeah if it’s Grp3 -vs- Grp3 … You think it has anything better ? It was way higher way early …
Considering the deal isn’t actually closed yet, nothing formulation wise has changed. And people are over thinking this. As this deal will take probably ~1 year to formally close.
Retail pricing varies a lot on deals made with retailers, how much volume they want to move that quarter, felt competition on the shelf, contract volume commitments, etc.
That’s why the Mobil and sopus deals can get silly at times. They’re literally losing money on it per quart. But, they have to move base oil and hit metrics. So they’ll lower the price or run a super rebate, etc. Valvoline is no different. When they contract gallons, they have to move them.
4WD
$50 site donor 2023
My thoughts had nothing to do with the M&A … they have sold this oil for considerably more as others posted
- Joined
- Nov 28, 2021
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I think the point is that Valvoline touts on its bottles, "American owned and operated" and that will no longer be the case. Valvoline is supposed to be America's oldest motor oil company, and now, its lubricants division will now be owned by Saudis. I am sure that the product itself will be unaffected.
Aramco is the largest company in the world, not oil company, the largest company by $ on the face of this planet. Seems to me that a 2TRILLION dollar company could just piss out a Valvoline (2.6 billion$) a thousand times, why buy one? Why not just make one? Likely a bit more to be said on the motives that we on our level would not know or understand, but seems to me to be a kick in the nuts.
To say that Aramco is a partner is just wrong.
I have been thinking about stop buying Valvoline|Napa products because of this decision the executives made. Some things just need to be left alone.
America should hold some things sacred, and as ridiculous as it may sound, perhaps motor oil should be one of them.
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- Jun 3, 2021
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Could you shed some light on this? Why do they have metrics to hit that lose them money?
If they committed to Lubrizol / Afton / Infineum / etc. that they’re going to buy, hypothetically, 30 million gallons worth of PCEO engine oil additive a quarter. And they have to buy matching base oil, or utilize it (assuming they refine their own) - they’re under contract to buy it.
Thus, instead of paying contract penalties for not accepting it. It would be better to take the momentary loss and blow out a bunch of product at cost. Or close to cost.
As if they don’t fulfill their contract with the additive / base oil venders, the next go around for purchasing negotiations, they will have to face that and might not have as much buying power.
So if you’re making a deal for 30 million gallons of base oil and it’s (random number) 5.00 gallon. But if you failed a contract, next time it could be 5.10 a gallon then.
So you would make 10 cents less per gallon on all your products sold.
Or you could blow out 2m gallons worth of product at cost, or at a minimal loss, and make that 10 cents on the other 28 million gallons. Just a hypothetical example. It’s why national account and oem volume is so important. It’s guaranteed volume. So they’re willing to basically break even on it. But they’ll make money on other things.
Volume is king. Because storage is expensive. It gets costly to store millions of gallons of product.
