December 23, 2014
Volume 7 Issue 3
API Renewal Period Opens Jan. 1
Worldwide, more than 12,000 engine oil products are licensed to display the American Petroleum Institute’s service mark, known as the “donut,” and the institute’s “starburst” certification mark. And every one of these licenses is going to expire if it is not renewed promptly between Jan. 1 and March 31, 2015, Kevin Ferrick of API reminded recently.
Ferrick has been urging oil blenders and marketers to renew their licenses, speaking in China, in Dubai, and most recently in New Jersey at the ICIS Pan American Base Oils and Lubricants Conference.
Only products with current API licenses are allowed to use the donut and starburst logos, which are protected trademarks, he emphasized. Currently there are nearly 650 licensed oil marketers around the world, and the share of these based in Asia is approaching 40 percent. There are 176 licensees in the Asia-Pacific region (mostly in China, Japan and South Korea), another 50 in Southeast Asia, 11 in South Asia and four in Australia.
Ferrick, who manages the engine oil licensing system from API headquarters in Washington, D.C., explained that all renewals must be completed by March 31 using API’s dedicated engine oil website (which is in English only). All companies that hold a license, or their oil supplier, will need to check the data about their products, brands, the API categories met, contact information and other details, and provide the number of gallons they sold in the prior year.
"The renewal process just requires licensees to sign the license agreement, enter volume of sale, and indicate how they plan to pay the renewal fee," Ferrick said. "Licensees that only pay the minimum fee can do so by credit card if they so choose."
Licensees are also responsible for all testing necessary to prove compliance with API’s Engine Oil Licensing and Certification System, he added said. The secure, password-protected site for licensees is https://engineoil.api.org/AccountManager/WelcomeMarketer
All licensees, including first-timers, pay a flat fee of U.S. $3,000 per year per company, not per product. A licensed company then can include any number of products under that approval. Some marketers, such as Toyota Motors, cite only a handful of products but the region’s oil majors such as Sinopec’s Great Wall, SK Lubricants, S-Oil, Petronas and JX Nippon often list scores of oil brands, types and viscosity grades.
When they renew, licensees also pay an additional fee of $0.005 per gallon (0.0018 per liter) of their total licensed product sold in the previous year, after the first million gallons. API member companies pay the same fees as nonmembers.
Once payment is confirmed, the renewed license will be valid through March 31, 2016.
For 20 years, license renewals involved a paper-based application system. Oil marketers had to painstakingly complete six separate forms and API itself had to enter the data, which created delays, risked errors and made updates difficult.
Since last year renewals have all been managed online, and the data is entered and updated directly by licensees themselves, which has increased accuracy and control.
“We no long accept paper-based applications,” Ferrick said in New Jersey. “We did receive a few of those and we sent them back to the applicants and told them to do it online.” He believes this advance has made it far easier for companies to join the system, and pointed to a 20 percent increase in the number of licensees since the online system was adopted.
“It is more real-time and effective,” he added.
All products holding a current API license are listed in a searchable database at https://engineoil.api.org/Directory/EolcsSearch. Marketers and purchasers worldwide can check this database to see if an oil claiming to meet API standards has actually joined the system and is entitled to display its trademarks.
API further protects the donut and starburst trademarks by monitoring the quality of oils sold in the marketplace. Launched 20 years ago, the Aftermarket Audit Program collects samples of passenger car and heavy-duty engine oils globally, based on a randomly generated blind list of licensed oils.
In 2013, the most recent year for which data is available, a total of 916 samples were collected worldwide. They included 723 products packaged in bottles and 193 gathered from bulk dispensing tanks. Most samples were gathered in the United States and Canada, but Asian countries including India, Singapore, South Korea, Thailand and Vietnam were also in the mix.
Each sample was tested by an independent laboratory for properties such as viscosity, volatility, shear stability, total base number, additive elements, pumpability and others. Products that failed the test face cancellation of their license if the problem is not addressed and corrected.
Of the 20 passenger car engine oil samples picked up in the Far East during 2013, 55 percent were “fully conforming” with the API specification on their labels, Ferrick told an audience in Dubai in October. Thirty percent had paperwork issues, although the oil itself was correct. Five percent of these samples (that is, one product in 20) contained a questionable additive, and 10 percent failed due to physical or chemical properties.
For information about the EOLCS system, email email@example.com