The following two graphs (left: automotive lubricants; right: engineering lubricants) depict the basket indexes of automotive and engineering lubricants for the past two years. “It reflects the inexorable rise of lubricant prices paid by larger SA organisations on the back of the increasing oil price. On closer inspection, however, it is interesting to note that automotive lubricants have risen considerably less than engineering oils (by almost 10%)”, Alan Low, MD of Purchasing Index recently told SmartProcurement.
“SA suppliers of fuels and lubricants are, perhaps surprisingly, having a tough time in the present economic conditions. The reason for this is that the DME (Department of Minerals & Energy) has not increased the margin on petrol for the oil companies, many of whom are now supplying fuel to their larger clients at a loss. This makes the lubricants market especially important and there is intense competition to win lubrication business with larger consumers. PI believes that SA customers should therefore ensure that they regularly test the market to ensure that they continue to get the lowest prices commensurate with the levels of service that they require.
In addition, it is extremely important that users make sure that they are using lubricants as efficiently as possible. “There is much evidence from tribologists and lubrication consultants that companies often do not use the most suitable lubricant for each application, resulting in wastage and ultimately increased repair and maintenance bills for equipment. Whilst price is an extremely important issue, failing to consider the other components of total cost of ownership can often result in far greater expense to the organisation”, Low concluded.
Alan Low can be contacted on the details below:
Telephone: +27 11 803 0005
Cell: +27 84 890 0005