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Monday, 7 May, 2001, 17:49 GMT 18:49 UK
US petrol prices hit all-time high
Mobil petrol station in the US
Higher prices come as Americans gear up for the summer "driving season"
US retail petrol prices hit an all-time high on Monday, the American Automobile Association (AAA) said.

The rise in prices comes amid a recent tightening of supplies from oil refineries, caused by technical problems and new environmental regulations which have lowered production capacity.

The rising price of petrol is tantamount to a tax increase on the American people

White House spokesman

In addition, petrol demand traditionally rises at this time of year as more Americans take to their cars for summer breaks.

The White House said President George W Bush was "very concerned" about rising petrol prices but would resist any short-term solutions.

Three cents more

The average retail price for a US gallon (3.8 litres) of regular petrol is now $1.68 (1.17) - three cents more than the previous high price touched last summer - the AAA said.

The motoring organisation, which based its figures on a survey of more than 60,000 service stations, said the highest prices were in California and the Midwest, where refinery output levels have been most affected.

It said the prices showed the need for an overhaul of national energy policy and the suspension of some environmental regulations in case of severe fuel shortages later this year.

Opec, the cartel of some leading world oil producers, has denied the record US petrol prices are because of inadequate global supplies of crude oil.

"The problem is with refineries and infrastructure," Saudi Arabia's oil minister Ali Naimi said on Monday during a visit to the US.

The price of Opec crude oil stood at about $26 a barrel on Monday - towards the higher end of the group's preferred $22-28 a barrel price range.

Lifting of tax ruled out

"The president is very concerned about the rising price of gas [petrol]," said White House spokesman Ari Fleischer.

"It is tantamount to a tax increase on the American people."

Mr Fleischer said the president wanted a national energy policy to force down petrol prices.

He ruled out lifting the 18.4 cents-a-gallon federal tax on petrol as a way of achieving lower retail prices, adding: "[President Bush] has never sought a quick fix because quick fixes don't work."

Controversial plans for Alaska

Mr Bush is believed to be in favour of increasing crude oil production in the US - the world's biggest consumer of oil and petrol - in order to lessen dependence on imports.

To help achieve this, he has already signalled that he might pursue controversial plans for opening up an Alaskan wildlife preserve to oil exploration.

He has also abandoned US commitments on the environment under the Kyoto climate change protocol - a move for which he was strongly criticised internationally.

A US government task force headed by vice-president Dick Cheney - a former chief of oil engineering services giant Halliburton - is due to deliver its recommendations for action on energy issues by 17 May.

Last week, the Federal Reserve - the US central bank - said it considered rising petrol prices threatened the chances of the US economy making a speedy recovery from its slowdown.

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