Gasoline refinery expansions scaled back

WASHINGTON — With Congress and the White House pushing to increases the use of ethanol, the oil industry is scaling back its plans to expand refineries – which could keep gasoline prices high, possibly for years to come.

President Bush has called for a 20 percent decline in gasoline use by 2017 and the Senate is debating legislation for huge increases in the use of ethanol as a motor fuel. So, oil companies see a growing uncertainty about future gasoline demand and less need to increase refinery capacity to make more gasoline.


A shortage of refineries frequently has been blamed by politicians for the sharp price spikes in gasoline.

This spring, refiners, hampered by outages, could not keep up with demand and imports were down because of greater fuel demand in Europe and elsewhere. Despite stable – even sometimes declining – oil prices, gasoline prices soared to record levels and remain well above $3 a gallon.

AP