Nigel Bottom, Managing Director of automotive and agricultural oils supplier Witham Group gave his verdict on the price of motor oil in the latest episode of the PMM podcast, telling host Kieran Nee “I think lubricant has certainly been very undervalued from a raw material purchasing point of view”.
Bottom expanded further, arguing: “if you look at climbing a set of stairs, we’ve gone up 10 steps and we’re probably only back down one or maybe one and a half. So, by no means are we back to where it was – although supplies have started to ease in certain commodities and certain products that we buy.”
He explains the reason for the fluctuation in price: “I think what has driven the latest increases, and when I say the latest, I’m talking well over a year now, is of course the terrible war in Ukraine, where sanctions of Russian base stock have come in, but there have been companies that have bought Russian base stocks and they’re not able to now – quite rightly so. They’ve come into the pool of the rest of the world’s supplies, which has obviously created shortages and [price] spikes in lubricant. Hopefully, we’re just starting to see some softening of the prices.
When asked whether high oil prices were with us for the foreseeable future, Bottom responded: “Yes. If you gauge the price on where we were 12 months ago. I think, and this is probably my personal opinion rather than an industry opinion, that lubricant has certainly been very undervalued from a raw material purchasing point of view.”
The podcast episode comes as the downturn in the price of crude oil since last summer comes to a halt following renewed western sanctions on Russian oil.
Also in the episode, the Witham Group boss, well respected within the industry, commented on the importance of using the right motor oil for each application: “Using the correct lubricant is paramount to every vehicle and the lubrication within that engine. There are figures quoted in the media by OEMs to say that if every single vehicle globally was using the correct lubricant, not a different lubricant or a better lubricant, just used the correct lubricant, then fuel economy globally would improve between five and seven per cent.”
Kieran Nee, host of the aftermarket podcast, gave his thoughts on the episode: “the price of oil has been a common theme over the past year in my conversations with workshop owners. There will not be much to smile about for many hearing this episode, with workshops having to continue passing costs on to customers for the foreseeable future. Another way of looking at the situation is that the price of an oil change is such a small cost compared to the price of the vehicle that the efficiency gains far outweigh the increased cost.”