American Petroleum Institute Licensing

What Is API Licensing

NOTE: Although the information in this article is still applicable currently, because it was written a number of years ago, you will find references to older API specs.

An API (American Petroleum Institute) license indicates that a specific motor oil formulation has passed the minimum performance standards as defined by a series of laboratory bench, physical, chemical and engine tests. These tests were selected and minimum performance standards were set by the API Lubricants Committee to address specific areas such as engine wear, deposits, fuel economy, emissions, etc. The committee is comprised of representatives from automobile, oil and additive companies.

The current gasoline oil specification is SJ/GF-2, and in July 2001 the first use of SL/GF-3 began. For diesel engines CH-4 is the lastest API specification, although new specs are on the way soon. Any API specification you see which begins with an "S" is a gasoline oil specification. Any API spec that you see which begins with a "C" is a diesel oil specification.

The higher the second letter, the newer the specification and the better the quality of the oil. For instance, an SJ oil is better than an SH oil and an SL oil is better than an SJ oil. Some specifications have been skipped by the American Petroleum Institute such as SI and SK.

The same is true of a diesel oil. A CG oil is better than a CF oil and a CH oil is better than a CG oil. In addition, a CH-4 oil is better than a straight CH oil. Just look for the highest spec available at the time and you can be sure you've gotten an oil which will adequately protect your vehicle's engine.

API Licensing Costs

The cost for running a test program for a single passenger car motor oil formulation is from $125,000 to $300,000, depending on if the formula passes the tests the first time through or requires multiple test runs or formula modifications to achieve a passing average. (That amount goes to $275,000 to $500,000 for a Heavy Duty Diesel licensing program on a specific formula.) Once that testing is complete and the formula has passed all of the minimum requirements, it can be licensed for $825 per year for non-members and $625 per year for members. There is also a small royalty fee per gallon sold for all gallons over one million. The length of time between new American Petroleum Institute specifications is now approximately 2 to 3 years, which does not allow a great deal of time to recover testing costs.
Who Licenses What Formulas?

Additive companies, such as Lubrizol, Ethyl, Infinium and Oronite, develop licensed formulas that they offer to oil companies to re-license. It is inexpensive to re-license one of these formulas, and the majority of oil companies choose to do this to avoid the costs associated with testing. This, however, tends to commoditize the market. The same chemistry is being sold under many brand names. Most of the major oil companies do have their own proprietary formulas developed, tested and licensed. All of AMSOIL INC.'s lubricant formulas are unique and proprietary.

Additional Info via the Links Below:

page 1 - current : What Is API Licensing?
page 2 : API Licensing IN-flexibility
page 3 : Warranties And API Licensed Motor Oils
page 4 : Conclusion