KARACHI, Dec 5: The multinational companies manufacturing lubricants have not reduced the rates despite steep fall in crude oil prices in the world markets in the last six months.

However, some local manufacturers have cut prices of their products.

The crude oil price plunged below $40 a barrel on Friday after hitting a record peak of $147 per barrel in July this year.

The National Refinery Limited (NRL) reduced the average price of lube base oil (main raw material used in making lubricants) by Rs25 per litre from August till to-date keeping in view of falling crude oil prices. However, the multinational companies are taking too much time in reducing the price of lubricants.

For example, a four-litre tin of PSO’s diesel engine oil now carries price of Rs1,228 as compared to Rs850 earlier this year. The same company’s Carient four-litre pack now sells at Rs1,020 as compared to Rs700.

In March the four-litre Havoline Formula (Caltex) engine oil pack was priced at Rs1,182 as compared to current rate of Rs1,540, while Supreme brand four-litre pack is now available at Rs1,156 as compared to Rs813 in March.

The Delo Gold 10-litre pack for diesel engine sells at Rs3,470 as compared to Rs2,762 earlier, while Delo Silver carries a price tag of Rs3,050 as compared to Rs2,372 in March.

The four-litre pack of CNG oil (Caltex) is tagged at Rs1,270 as compared to Rs939 in March. The Caltex’s 700ml (for 70cc motorcycle) is available at Rs196 as compared to Rs155 in March.

Chairman All-Pakistan Lubricants Manufacturers Association (APLMA), Mian Zahid Hussain said that the base oil prices had surged by at least seven to eight times from January till August. The local industry procures 180,000-200,000 tons of lube base oil from the only producer (NRL) and later some additives are mixed for manufacturing lubricants.

Now the current average price of lube base oil is Rs125 per litre as compared to Rs150-155 per litre in August.

“I have already asked the multinational companies to reduce the rate,” he said adding that the companies say they are working on it.

He said some 40 local lubricant makers have slashed their prices by Rs20 per litre since August.

The total annual consumption of lubricants in the country is 400,000 tons, of which the local production is around 200,000 tons, and legal imports hover between 20,000 and 25,000 tons. There is another production of 10,000 tons from reclaimed oil and the rest of the demand is met through smuggling of 70,000-100,000 tons of lubricants per annum. Some producers also make 75,000 tons of lubricants by mixing diesel with rubber.

The APLMA chairman said the government should reduce the excise duty on both locally made and imported lubricants. The government charges Rs15 per litre on locally produced lubricant, while there is Rs7.15 per litre excise duty on import of lubricants.

Chairman Pakistan Petroleum Dealers Association (PPDA) Abdul Sami Khan said that the lubricants prices had nearly doubled in the last one and a half years as the government has given free hand to big companies to play havoc with the prices.

The big companies should now pass on the impact of substantial decline in crude oil prices to the consumers of lubricants, he added.