The rise in oil also makes lubricants more expensive

Ecuadornews:

The constant rise in oil prices that feed the fiscal accounts of the country also has its negative effect. Not only does importing fuels become more expensive, the cost of producing other derivatives such as lubricants and additives for cars has also become more expensive.

According to the Association of Ecuadorian Producers of Lubricants (APEL), the recovery of crude oil caused the prices of raw materials used by the sector to rise up to 30% in the cost of lubricating bases and up to 12% in additives. A variation that has made the costs of finished products, such as lubricants, have risen between 5% and 10%, as estimated.

Valeria Naveda, representative of APEL, explains that the variation in raw material prices does not always have the same effect on the value of finished products, due to market conditions. She argues that, in general, companies manage a stock of raw materials that allows them to adjust their prices little by little. “That is why it is possible that the price increase that was perceived in the first half of the year is being felt just at the end of the chain, since most distributors also operate with a stock.”

A tour conducted by this newspaper concluded that in the market there is still no significant increase in costs, but the warning that prices could vary in the coming days. Wilson Herrera, administrator of a lubricator located between Balzar and Cuenca streets, mentions that in his case the price of lubricants is still maintained, but he recognizes that it will not be for a long time. “Our suppliers have already notified us that there will be a rise and that is what we are waiting for,” he said. At his store, he says, one gallon of Gulf-brand lubricant remains at $ 14 and one gallon at $ 19.

Naveda explained that at this moment the price of the lubricating bases that are used to manufacture the product “have been temporarily stabilized; however, as we have already mentioned, the price stability of finished products will depend not only on the price of crude oil but on a set of factors.”

Last Monday, the cost of a barrel of oil closed at $ 75.30, its highest level since November 2014, with an expectant market to see how the US sanctions. UU against Iran can affect the world supply. An improvement that affects the total cost of imports that the country has made in fuels and lubricants, during this year.

According to the Central Bank of Ecuador, until July, for this item the country spent $ 2.410 million, 39.9% more than the same period last year, this despite the fact that the volume imported in that same time hardly increased 8%. (I)

Source: https://www.expreso.ec/economia/crudo-petroleo-aditivos-aceite-vehiculos-economia-ID2401695