Dear Jon: Gas prices and motor oil don’t dance to same drummer

It’s any easy comparison to make, gas prices are lower so motor oil should be lower. You’d think the price change should be reflected when you take your car to have the oil changed. Miguel wrote to me and asks, “Dear Jon, crude oil prices are down by half, why haven’t oil changes for autos gone down from the ridiculous prices they are now?”

It has certainly been a holiday at the gas pump, experts say it’s the lowest we’ve seen in over 10 years. But oil changes are a different story says Hartnell college economist Tina Esparza-Luna, “When you take your car into to get an oil change, you also have to pay the labor it’s not just price of the motor oil.”

With hourly wages on the rise, Esparza-Luna says those increases get passed on to consumers. But what about motor oil off the shelf?

Says Esparza-Luna, “In the motor oil category, because there’s so much competition it keeps prices already at a relatively low level or competitive level. Verses with gas, there’s not many choices so the prices can go up and the profit margins can be larger.”

“We have petroleum based oil and we also have synthetic oils, and there are so many weights and grades that they’re looking at so there’s a lot more competition because there’s a lot more products we have to choose from,” says Esparza-Luna, “so the prices aren’t going to fall as much because not all of those products are petroleum based products and not as dependent on the price of petroleum.”

So what’s the outlook for 2015? Prices have gone up a bit since their lowest point, but Esparza-Luna says barring any big issue and we did have an explosion at a refinery in southern California Wednesday, so we’ll have to see how that may impact gas prices. But Esparza-Luna anticipates gas prices remaining generally lower this year, benefiting your family budget.

If you have a question, email me at “DearJon@KIONRightNow.Com. And I’m on also on Facebook, Jon Brent KION.