Paint Costs Not Affected by Falling Oil Prices

paint manufacturing facility

With falling oil prices across the globe don’t expect the cost of paint to go down any time soon

Like us, you too might think that lower crude oil prices mean lower paint prices! Unfortunately that’s not the case. Paint manufacturers buy the oil based products, used in the production of paint, well in advance. This means the oil in the paint you buy today was most likely purchased by the paint maker over 12 months ago.

Energy companies follow a similar practice. It usually makes much better business sense to speculate on commodities and buy in materials many months before they will be used. I say it “usually” makes better business sense, but nobody could have foreseen such a dramatic drop in the price of oil in such a short space of time.

oil production at sea
Oil exploration could be cut to stabilize crude oil prices

There are many reasons for the fall in oil prices but I’m not going to go into them in detail. My focus will be on paint, the product we use most here at D&D Coatings. Paint is without doubt the most important component in our day to day activities. The higher the cost of paint unfortunately means higher our costs are to our clients. We, unlike the paint manufacturers, energy companies and airlines etc don’t have the luxury to be able to buy our supplies in advance. If we could, we would and in turn pass on any savings to our clients. But it’s not an ideal world.

So, for now, we will have to live with stable paint costs. However if the price of crude oil remains as low as it is then I think in the not too distant future we will all be able to enjoy lower paint costs. You can read an interesting article here about how paint makers will soon start to reap the benefits of such low oil prices.

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