State-owned oil marketing companies have hiked the prices of lubricants by as much as Rs.15-18 a litre across all grades.
The move by the three companies earlier this month, which, between them, command close to 60 per cent of the Rs.15,000-crore lubricant market, is attributed to rise in the price of base oil, the main raw material.
“Lubricant prices in one or other way are linked to international oil prices,” an official of Indian Oil Corporation (IOC) said, adding that weakening of the rupee against the dollar was another reason. Additives, another key input, were proprietary products of a few companies globally, he explained.
The prices (per litre across grades) of IOC lubricants have gone up by Rs.18. While Hindustan Petroleum Corporation Ltd (HPCL) increased the prices by Rs.17, Bharat Petroleum Corporation Ltd (BPCL) hiked the prices by Rs.15, officials and distributors said.
The lubricant market, comprising automotive and industrial products, is highly price-sensitive and sales by volume are around 1.5 million tonnes per annum. Automotive grade lubricants account for 55 per cent of the market. Besides the three oil marketing companies, Castrol and Shell figure in the top five brands.
The IOC official said the company last revised the prices in July last year, while BPCL and HPCL followed suit in August. The increase is bound to impact all segments of automobile owners and comes as petrol prices are expected to drop further on account of declining crude oil price. The government is also taking time to address the issue of under-recoveries on diesel.
Tamilnadu Petroleum Dealers Association President and HPCL dealer M. Kannan said the first to feel the impact of lubricant price hike were two-stroke two- and three-wheeler owners as they purchased petrol mixed with the lube. The oil companies, he added, should make public whenever they increased the lube prices as, in the absence of such an announcement, motorists tended to disbelieve the dealers.
Barring 2-T oil sales, sale of other lubricants at petrol bunks is negligible as the products are pushed through the bazaar market, automobile mechanics and workshops besides original equipment manufacturers.