Iran war is driving up the cost of your next oil change
Higher gas prices were just the warm-up act for drivers, repair shops and retailers like Walmart and Costco.
In recent weeks, automobile repair-shop owner Ali Alhumaidi in Detroit has observed a new trend among his customers. Instead of purchasing motor oil from the store, many are bringing their own bottles of oil to the shop for oil changes. With labor costs around $100, Alhumaidi charges customers only $20 to $50, perceiving the oil itself as being too expensive.
This practice is likely to become unsustainable soon. The Iran conflict has significantly impacted not just diesel prices, but also the cost of motor oil, driving them up to $4.49 per gallon on average. Major retailers like Walmart and Costco are taking notice and adjusting accordingly. Walmart increased the price of its motor-oil selection earlier this summer and raised the price of oil-change services by a few dollars each in August.
Costco also increased the price of its private-label Kirkland motor oils to $58 for 10 quarts and limited the quantity an individual customer can buy online. These price hikes are due to the conflict in the Middle East, which has caused inflation in motor oil, as recognized by Costco's Chief Financial Officer Gary Millerchip. Stellantis, the parent company of Jeep and Ram brands, has switched its bulk oil supply to a less optimal 5W-20 for some V-6 and V-8 engines, which will require more frequent servicing.
Valvoline Inc., a quick-lube retailer, has also experienced a sharp rise in synthetic-motor-oil costs since March, resulting in a $5 to $7 increase per oil change. Valvoline has passed these cost increases to both company-owned stores and independent franchisees. The supply of synthetic oils has been tightening since March due to disruptions in specialized refineries in the Persian Gulf caused by the Iran conflict.
While U.S. refineries cannot manufacture Group III base oils, the shortage is compounded by high diesel fuel prices, which are also supply-chained to Group III base oils. Many independent auto-service businesses may struggle to pass on these additional costs to customers, as they do not have the same bargaining power as large retailers like Walmart and Costco.
Written by urgent.news from Hindustan Times - World News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
