COVID-19: Impact on Lubricant Market

Public sector oil companies like Indian Oil Corporation Ltd, Balmer Lawrie, HPCL & BPCL and major private sector players like Castrol India & Gulf Oil Lubricants India Ltd. temporarily closed its lubricant plants (fully or partially) as the government tries to stop the spread of the deadly coronavirus in the world’s third-largest lubricant market. The partially operating plants are manufacturing lubricants for Defence & Essentials services.

The local authorities and various state governments in India issued directives around the week of March 2020 to shut down factories and offices as well as public transport for a few days to prevent the spread of the coronavirus, which has killed more than 47,245 globally as of 2nd April 2020 (10:01 am), according to the World Health Organization.

India, Asia’s third-largest economy, has also been affected by the coronavirus, and the government has taken several measures to slow the pandemic. The retail market and institutional sales of lubricants is down by over 75%, which may adversely affect the books of most of the companies.

It is expected that even after the national lockdown is lifted some time in mid-April 2020, it may take at least a few quarters for the economy to come on track. Industry officials feel that the complete lockdown in the country will put further strain on businesses, including auto sector, which is already facing the heat due to change over from BS IV to BS VI, which was to be implemented from 1st April 2020. There is also subdued demand amid slowdown in the economy and weak consumer sentiment.