Al Speaks
Quote:
Regarding pricing of our products, as of this date we still have not received a single price reduction on any of our raw materials even though the price of oil and gasoline has been falling dramatically. I repeat- we have not received a single price reduction on any of our raw materials. There are several reasons for this. First, there are still supply issues for lubricant base stocks and additives due to the impact of the last hurricane (Ike) on refineries and chemical processing plants in Texas and Louisiana. Many of the refineries in the region were affected and some have still not restarted operations yet, so this is naturally keeping prices high. Beyond that, the volatility of crude oil has frozen the oil and chemical industries in place and prevented them from taking any pricing action. Recently, the price of oil has fluctuated almost $30 per barrel in less than a 30 day time frame. This prevents oil and chemical providers from jumping on the bandwagon to change prices with 30 days notice due to the uncertainty of where things are going. It will take a period of stability and lower oil prices to start moving our costs downward. Even then, it will take some time for lower costs to work their way through inventories and result in price decreases to AMSOIL, so we can in turn offer decreases to our customers.
Please know that we will do the right thing, and when our costs come down, so will our prices. As our recent Action News articles have detailed, you will find that the prices of all lubricants have jumped even more than the cost of AMSOIL when you do pricing comparisons in stores. Throughout the entire period of cost escalation, we did everything we could to keep our cost increases lower than our competitors and only raised our prices when we had to in order to simply recover those cost increases.
Quote:
Regarding pricing of our products, as of this date we still have not received a single price reduction on any of our raw materials even though the price of oil and gasoline has been falling dramatically. I repeat- we have not received a single price reduction on any of our raw materials. There are several reasons for this. First, there are still supply issues for lubricant base stocks and additives due to the impact of the last hurricane (Ike) on refineries and chemical processing plants in Texas and Louisiana. Many of the refineries in the region were affected and some have still not restarted operations yet, so this is naturally keeping prices high. Beyond that, the volatility of crude oil has frozen the oil and chemical industries in place and prevented them from taking any pricing action. Recently, the price of oil has fluctuated almost $30 per barrel in less than a 30 day time frame. This prevents oil and chemical providers from jumping on the bandwagon to change prices with 30 days notice due to the uncertainty of where things are going. It will take a period of stability and lower oil prices to start moving our costs downward. Even then, it will take some time for lower costs to work their way through inventories and result in price decreases to AMSOIL, so we can in turn offer decreases to our customers.
Please know that we will do the right thing, and when our costs come down, so will our prices. As our recent Action News articles have detailed, you will find that the prices of all lubricants have jumped even more than the cost of AMSOIL when you do pricing comparisons in stores. Throughout the entire period of cost escalation, we did everything we could to keep our cost increases lower than our competitors and only raised our prices when we had to in order to simply recover those cost increases.
