Nick Snow
Washington Editor

WASHINGTON, DC, Mar. 31 -- Oil costs, and not refinery turnarounds, are primarily responsible for higher gasoline prices, American Petroleum Institute officials said.

"We have significant gasoline inventories on hand. We also have relatively soft demand. So it's no great surprise that turnarounds are taking place," API Pres. Red Cavaney told reporters during a Mar. 31 teleconference.

Diesel fuel prices may be climbing more rapidly because governments in Europe have created greater demand and imports from there are harder to find, Cavaney said. "The increase from Jan. 1 through [Mar. 28] was 95¢. Unlike gasoline, which is about 20¢/gal less, it seems to be in lock-step with crude," he said.

"You have a tighter market for diesel than for gasoline," added John C. Felmy, API chief economist, who also participated in the teleconference.

Their remarks came 3 days before the Senate Energy and Natural Resources Committee's scheduled hearing to examine whether nonoil institutional investors are influencing crude prices. They also followed a Mar. 26 Consumer Federation of America report which alleged that refiners are performing maintenance now to reduce inventories and increase profits during the summer driving season.