ILMA Submits Comments to FTC on Major Oil Company Pricing

ALEXANDRIA, VA (June 24, 2008) — Yesterday ILMA submitted comments to the Federal Trade Commission (FTC), asking the Commission to include a discussion of current pricing practices in the lubricants industry as "manipulative" under its rulemaking to interpret and enforce provisions of the 2007 Energy Independence and Security Act (EISA).

"The potential practice of concern to ILMA and its members is the rapid escalation in the prices of base oils sold by refiners to non-refiner blenders/marketers, including independent lubricant manufacturers, at the wholesale level and the slow pace that these same refiners increase the prices of the finished oils sold under their brand names," the Association stated.

In its comments, ILMA reviewed the pricing practices since November 2007 of ExxonMobil, Shell/Motiva and ConocoPhillips. The Association said it selected these three companies - all ILMA Supplier Members - "because of their importance in the merchant base oil market, their size and the influence of their pricing decisions on non-refiners."

For example, ILMA pointed out that ExxonMobil has raised Group II+ base oil prices six times by a total of $1.30 per gallon since November 2007; however, during this same, it has announced only one finished oil price increase of approximately $ 0.40 per gallon. The Association noted that there was a 154-day lag between ExxonMobil's first base oil price increase and the one finished oil price change.

Similarly, ILMA set out for the FTC how there was a 91-day lag between Motiva's base oil increases and Shell's finished oils increase. The Association noted that there was a 137-day lag between three base oil price increases by ConocoPhillips and its finished oils increase. ILMA noted that while there should be some reasonable period of time for sellers to inform their customers of price increases, 154, 91 and 137-day lags were not reasonable.

"ILMA received a number of comments from concerned members and those comments built the foundation that ILMA needed, in order to make our case to the FTC," ILMA Executive Director Celeste M. Powers, said. "I would like to thank everyone who took the time to contact Jeff Leiter and express their concern. ILMA is committed to helping its members compete - and succeed - in a fair marketplace."

The comments will be available to review on the Association's website tomorrow.

The Independent Lubricant Manufacturers Association (ILMA) was founded in 1948. ILMA's 292 members include independent lubricant companies that produce more than 25% of all lubricants and 80% or more of the metalworking fluids and other specialty industrial lubricants sold in the U.S., and key suppliers of raw materials and services to independent lubricant manufacturers.