AMSOIL is raising prices in Canada on July 1st, 2015 by an average of 9.5% due to the steep decline of the Canadian dollar over the past year. The Wisconsin-based synthetic oil and filter maker had been grappling with the erratic currency exchange rate for several months and were ultimately forced to take this step.
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How Does A Lower Loonie Affect AMSOIL Prices?
AMSOIL is based in the United States, so naturally all of their business and productions costs are priced in US dollars. As the Canadian dollar weakens versus the US dollar, it requires more Canadian dollars to cover the cost of their products. The Canadian dollar has weakened by almost 16% since July 1st, 2014. This means that AMSOIL is receiving about 84 cents on the dollar compared to this time last year. As you can imagine, this is a situation that cannot sustain itself without a price adjustment.
Other motor oil producers have been raising their prices in Canada over the last year, so this is not a situation that is unique to AMSOIL.
But Hasn’t The Price Of Crude Oil Dropped Too?
We are often asked, “Hasn’t the drop in the price of crude oil lowered AMSOIL’s raw material costs and doesn’t this offset the weaker Canadian dollar?”. That is a very valid question and one we posed to AMSOIL brass ourselves. Unfortunately the drop in crude prices does not outweigh the drop in the Canadian dollar as one might assume.
The base oils and additives required to make their synthetic oils are very sophisticated chemicals that require expensive processing. The drop in crude prices has little to no effect on these chemical ingredients and many of them have actually increased in price over the past year.
Despite the price increase, AMSOIL has a high-powered and extensive product line that still represents the best value on the market. When one considers the wear protection, performance and long life offered by AMSOIL products, it’s easy to see why your dollar can still go further with AMSOIL.
Questions? Call us at 1-800-748-5781.