Crude prices make lubricants dearer

Hike ranges between Rs. 2 and Rs. 3 a litre.

N. Ravi Kumar

CHENNAI: : The national oil marketing companies might have spared the consumers for the time being by not increasing petrol and diesel prices this fortnight, but they have raised the prices of lubricants.

Starting with Bharat Petroleum Corporation Limited, which increased the prices of its lubricants by Rs.2-3 a litre on August 1, Hindustan Petroleum Corporation Limited and Indian Oil Corporation, have hiked the prices.

While industry sources say HPCL increased the prices recently up to Rs.4 a litre, a senior official of IOC says the company went in for an upward revision in the prices of some grades of its lubricants on Friday. The hike ranges between Rs. 2 and Rs. 3 a litre. The company last increased the prices a year ago.

The reason is the galloping crude oil price that has made base oil, raw material for the lubricant, dearer. Unlike petrol, diesel, kerosene and liquefied petroleum gas, pricing of lubricants is not `controlled' by the Government. It is a free pricing branded product and a must for not only automobiles, but also for industrial machinery.

"Use of lubricants is a necessity for any movable machinery and automobile," the IOC official says. Though there are 2,000 formulations, only 400-500 lubricants are commercially marketed.

Engine oil, used in two-stroke and four-stroke two-and three-wheelers and other commercial vehicles, are among the popular lubricants. Commercial vehicles consume 70 per cent of the lubricants sold in the retail segment, while two-wheelers account for 14 per cent. The annual lubricant consumption in the country is around 1.16 million kilolitres and worth Rs.6,000 crores.

IOC dominates the market, in which over 10 private players also vie for a share, say the sources. According to the IOC official, the private players have been increasing the prices of lubricants in small doses regularly, and "their price is 20 per cent higher than us."

Since 2-T oil is dispensed by the national oil companies along with petrol, the price of the fuel has increased marginally following the increase.

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