Dear Valued Customers,
Attached is our official circular to inform you about the current situation regarding the rising base oil prices. The attachment contains documents showing the price increase data of base oil since the end of 2020, as well as information from the global additive vendors we use, and from drum manufacturers who have also reported a significant price hike.
As a result, due to the urgency of this situation—which is expected to impact many lubricant manufacturers—our market will continue to offer competitive pricing despite the widespread price increases.
We are committed to maintaining the quality of our products and ensuring product availability, while upholding our excellent service level.
The key factors driving this price increase are:
- Rising Base Oil Prices: Due to the reduction in base oil production by refineries, a direct impact of the COVID-19 pandemic, base oil prices have steadily increased. As global activity slowed, fuel consumption dropped significantly. During crude oil refining, the majority of the process results in two products: fuel and base oil. As fuel production decreased, so did the production of base oil.
- Additive Price Increases: Supporting additives have also contributed to the price rise (as detailed in the attached notice). Additionally, drum prices have surged due to the shortage of steel production, causing a significant increase in packaging costs. Other components that factor into selling prices have also experienced price hikes.
In response, we will continue to monitor price trends and make necessary adjustments. We are planning to revise our prices in May 2021, depending on the situation (this may happen sooner or later). Rest assured, any price adjustments will be made cautiously and gradually to minimize any negative impact.
We hope this information is clear, and we look forward to maintaining our strong partnership.
Kind regards,
PT. Specta Indonesia Gemilang
