AMSOIL Product Pricing and the Future

A number of customers have asked about what impact the current economic turmoil is having on AMSOIL. Here are four observations addressing these current issues.

1. Raw materials costs have remained high
Regarding pricing of our products, the price of oil has recently fluctuated almost $30 per barrel in less than a 30 day time frame. This prevents oil and chemical providers from jumping on the bandwagon to change prices with 30 days notice due to the uncertainty of where things are going. To start moving costs downward will require a period of stability and lower oil prices. Even then, it will take some time for lower costs to work their way through inventories that can result in price decreases to AMSOIL that we can in turn offer to our customers.

2. AMSOIL price increases have been smaller than others
AMSOIL has not been exempt from the high cost of raw materials for formulating its products. Nevertheless, on a percentage basis we’ve managed to hold the line on price increases to a greater extent than many of our competitors.

As of this date the company still has not received a single price reduction on any of its raw materials even though the price of oil and gasoline seems to have fallen dramatically. There are several reasons for this. First, there are still supply issues for lubricant base stocks and additives due to the impact of hurricane Ike on refineries and chemical processing plants in Texas and Louisiana. Many of the refineries in the region were affected and some have still not restarted operations yet. As a result, prices remain high. Also, the volatility of crude oil has frozen the oil and chemical industries in place and prevented them from taking any pricing action.

Customers can be confident that when it becomes possible to lower prices, AMSOIL will do the right thing.

3. AMSOIL products save you money
AMSOIL products are right for the environment while still being right for our customers’ wallets. Longer drain intervals and better fuel economy add up to savings you won’t find with any other motor oil. Convenience, protection, less waste, more miles per gallon... it’s all good, for you and the world you live in.

4. The company continues to grow and is financially sound
AMSOIL is a privately held company that has a fiscally conservative management style. AMSOIL is financially secure. The company has experienced eighteen consecutive years of double digit growth and is continuing to grow despite current hardships in the auto industry. If new car sales are down, it only means that people have to take better care of their older vehicles to keep them running longer. Because AMSOIL sells the most cost effective, environmentally friendly and best performing products on the market today, we approach the future with confidence.

AMSOIL INC.
October 20, 2008