Rerefining's shift from paying generators for their used oil is starting to gain momentum--which has been reinforced by some of the biggest names in the industry. The November 2015 issue of Lubes n' Greases announced that many used oil service companies are to begin charging to pick up used oil from all non-contract generators; there were also announcements of service-call surcharges.
"The recent decline in crude oil pricing, along with associated decreases in fuel and base oil pricing, have materially affected the values of recycled fuel oil and rerefined products," (Lubes n' Greases pg. 50) Given the impact of these falling oil prices, it has been a necessary change to many of the major players in the used oil market: service providers are starting to charge disposal rates in order to lessen the pressure on their margins." Unfortunately, Central Oil & Supply is no exception to the volatile market--as of December 3, 2015, we will begin charging $125.00 per used oil pickup and $25.00 per drum pickup.
According to Lubes n' Greases, the sharp decline in petroleum prices, along with its ripple effects, "[are] the key factor." "It's more the crude markets, and it is the result of this imbalance of supply and demand that has pushed down pricing on just about all the products, from base lube to refinery fuels," the magazine wrote in their November interview. "Over the past 12 months, the price of bent crude oil has fallen from $105 per barrel to under $45 per barrel." "During that same period, the price paid by used oil collectors has fallen by around 80 cents a gallon (51)."
As always, your best interest it is Central Oil & Supply's first priority. The decision to charge for used oil pickups did not come lightly, and we will continue to monitor the Platt's pricing and adjust as the market changes.
If you have any questions at all regarding used oil pickups, please do not hesitate to contact your account manager or our inside sales department at 318-388-2602.