The collapse of crude oil prices are delivering a “sting in the tail” to automotive workshops accustomed to making money from its sale.
That is how Phil Evans, commercial director at fuel manufacturing and waste oil company RE:Group, described a market shift that now sees workshops forced to pay for the disposal of their oil rather than make an income from it.
He said: “It would be natural to think that garages would gain all-round from cheaper oil, but that is not the case. Charges for disposal look like remaining for some considerable time.”
One upside is that the prices garages pay for highly refined replacement lubricating oils has reduced, said Evans.
RE:Group operates a waste oil collection and recovery facility in Hull, called RE:Claim.
Describing how falling oil prices have affected its operations, Evans said: “The price of our service to the industry has to reflect the fact that, upstream, we are competing with virgin fuels, whose price, as we all know, has come down at an extraordinary rate.
''We have now reached the point where the value of the recovered fuel is lower than the cost of recovery and, as such, waste producers are required to contribute to the recovery cost.”