- WASHINGTON (Reuters) -- The
Bush administration is "extremely concerned" about soaring retail
gasoline prices, which recently topped $1.70 per gallon nationwide and
are likely to set a record high this month, according to energy officials.
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- "This administration is extremely concerned,"
U.S. Energy Secretary Spencer Abraham told reporters after testifying before
a Senate appropriations subcommittee on the department's proposed budget
for fiscal 2005.
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- Abraham did not say what, if anything, the administration
was doing about rising gasoline prices.
-
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- At a separate Senate hearing on energy supply and demand,
the head of the U.S. Energy Information Administration said there was a
"good possibility" that retail gasoline prices will set a new
high by the end of March.
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- The current national average price for unleaded gasoline
is $1.72 per gallon, just 3 cents shy of the record set during late August,
according to the EIA, which is the statistical arm of the Energy Department.
-
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- Tight global supplies of crude oil, a recovering U.S.
economy and the looming summer driving season mean that gasoline prices
are certain to climb higher during the next few weeks, according to EIA
analysts.
-
- The EIA has also warned that because U.S. gasoline inventories
are below normal levels, any problems at a refinery or pipeline may cause
supply disruptions and a resulting rise in price.
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- EIA Administrator Guy Caruso said that the recent rise
in wholesale gasoline costs has yet to be fully passed through to motorists.
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- "While it is still too early with any certainty
how high prices will go this year, many signs are pointing to a tight gasoline
market this driving season," Caruso told the Senate panel.
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- Caruso rejected criticism from some lawmakers who say
the administration should stop putting crude oil into the Strategic Petroleum
Reserve and keep as much petroleum on the market as possible.
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- "Our view is it doesn't reduce oil supply. We believe
the world oil supply has not been affected," Caruso said. The amount
of oil going into the crude oil stockpile was being offset by additional
production from OPEC, he said.
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- Crude oil accounts for nearly half of the cost of a gallon
of gasoline. The volatile U.S. April futures contract, which soared earlier
this week to nearly $37 per barrel, closed at $36.64 per barrel on Thursday.
OPEC agreed last month to cut its output by 1 million barrels per day (bpd)
on April 1, and to curb 1.5 million bpd in production over current quotas
to keep supplies in check.
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- During his appearance on Capitol Hill, Abraham did not
discuss gasoline prices or OPEC crude oil production. He instead sought
to justify the Energy Department's proposed $24.3 billion budget for fiscal
2005, which begins on Oct. 1.
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- Abraham reiterated Congress should pass a broad energy
policy bill, now stalled in the U.S. Senate. The $16 billion bill would
double the use of corn-distilled ethanol and offer incentives for oil and
gas drilling.
-
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- "I think the question should be whether the Congress
is prepared to go into the election season having once again -- if it does
-- fail to pass an energy bill," he said. "This administration
has done everything we can."
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- John Kerry, the Democratic frontrunner for his party's
presidential nomination, has supported unsuccessful legislation that would
impose stricter mileage standards on sport utility vehicles and other gas-guzzling
automobiles.
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- - Additional reporting by Tom Doggett
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