Gandhar oil production

Using the term “synthetic lubricant” can sometimes be confusing as it concerns two different categories, one that is produced by refining crude oil with chemical treatment and the other is produced with 100% synthetic molecules without any mineral oil refining. Mineral base oils on the other hand are produced by crude oil refining.

 Compared to regular oil, synthetic oils or lubricants have many advantages:

  1. It flows easier in cold weather, therefore no loss of prime when the oil is cold. Also, it is highly resistant to viscosity breakdown (the ability of the oil to flow easily in all temperatures) from heat, friction and chemical contaminants. Synthetic oil is slippery and therefore needs to be used with caution on high mileage engines and in new engines during the break-in period.
  2. Synthetic lubricant change frequency is lower than regular oil change frequency. Indeed, there are longer drain intervals as well: 7,500 to 10,000 miles between synthetic lubricant changes (compared to 3,000 for mineral oil).

While the cost of synthetic alternatives is high and can be five times as much as mineral oil based lubricants, their numerous benefits as enumerated below, often outweigh this cost.

  • Better low- and high-temperature viscosity performance at service temperature extremes.
  • Better viscosity index (VI).
  • Better chemical and shear stability.
  • Decreased evaporative loss.
  • Resistance to oxidation, thermal breakdown, and oil sludge problems.
  • Possibility to extended drain intervals, with the environmental benefit of less used oil waste generated.
  • Improved fuel economy in certain engine configurations.
  • Better lubrication during extreme cold weather starts.
  • Possibly a longer engine life.
  • Superior engine protection against “ash”​ and other deposit formation in engine hot spots particularly in turbochargers and superchargers. This helps in less oil burn off and reduces the chances of damaging oil passageway clogging.
  • Increased horsepower and torque due to less initial drag on the engine.
Gandhar laboratory

(Pictured Above: Gandhar Oil R&D Center)

A fast-moving market:

According to a report published last year by ResearchAndMarkets.com, the global synthetic lubricants market was valued at $12.0 billion in 2018 and is projected to reach $18.8 billion by 2026, growing at a CAGR of 5.8% from 2019 to 2026.

The growing automotive industry and industrialisation across the globe are driving the market for synthetic lubricants. Enforcement of environmental regulations on the automotive sector to reduce carbon emission has also boosted sales and created various opportunities for synthetic lubricant manufacturers. The demand is increasing due to their properties, such as water solubility and high viscosity indexes, and bio degradability as mentioned above.

What’s driving the growth in India?

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  • Demand from the automotive industry

The automotive industry, thanks to many technological advancements, is witnessing a period of substantial growth in APAC and North America. The increasing vehicle production is also responsible for the growth of the synthetic lubricants market. Growing sales of passenger and commercial vehicles, especially in emerging economies, such as APAC, Africa, and South America, is resulting in the increasing number of vehicles on the road and has a major impact on the demand for synthetic lubricants. Besides the increasing vehicle population and the rising demand for fuel efficiency have led to the increased use of high-quality oil and lubricants, which in turn, has positively impacted the market.

  • Increasing industrialisation

The massive industrial growth in APAC has been fuelling growth and is expected to continue doing so during the next five years. India has attracted several investments in key industrial sectors such as construction, cement, steel, and energy which is expected to drive sales during the forecast period.

  •  Evolving environmental regulations

Governments all over the world are emphasising the need for stringent CO2 emission standards for new passenger cars and light commercial vehicles. These regulations around vehicular emissions are likely to increase the consumption of synthetic lubricants as they can significantly reduce carbon emissions from vehicles. OEMs recommend the use of high-performance lubricants to increase fuel efficiency and reduce emissions.

  •  Innovative technologies

The key players in the sector have access to new technologies, capital, and human expertise. With increasing investment in R&D, they are likely to come up with environmentally friendly, efficient, and effective synthetic lubricants at very competitive prices. This would enhance their product portfolio and brand image.

The price of synthetic lubricants can go up two to five times that of mineral oil lubricants and silicone-based synthetic lubricants can go as high as 20 times. While developing markets such as China, India, Africa, and Brazil are extremely price sensitive, synthetic lubricant manufacturers are well poised for expansion and growth in these geographies because of the active R&D and innovation in this segment, the growing demand for low emission fuels as well and the wide application of this product in the automotive and industrial sectors.