April 23, 2006	Sunday	Rabi-ul-Awwal 24, 1427

DOHA, April 22: The International Energy Agency is concerned about a looming gasoline (petrol) shortage in the United States, but would only order the release of strategic stocks if a major supply disruption occurs, a senior IEA official said.

US supplies are under threat as the world’s biggest energy consumer switches to a new kind of motor fuel and US Energy Secretary Sam Bodman has said consumers should expect some short-term gasoline supply disruptions this summer.

“We are worried about supply in general throughout the world and particularly of gasoline and particularly in the United States,” IEA chief economist Fatih Birol told Reuters on Saturday.

But he said an IEA stock release would only occur if the agency’s strict criteria were met.

“It depends on the executive. We release stocks when we face a physical catastrophe, but we don’t intervene in the market,” he said.

Most US refiners are in the process of switching from methyl tertiary butyl ether, or MTBE, which has been found to pollute water supplies, to ethanol.

As the transition disrupts refining activity, the risk of a shortage in the United States — which consumes a quarter of the world’s oil and more than 40 per cent of its gasoline – has pushed US gasoline prices towards the $3 a gallon level hit following hurricane damage last year.

Together with fears of US military action against Iran, the gasoline problems have helped to drive crude futures prices to record levels above $75 a barrel.

After hurricanes last year knocked out US refining capacity, the IEA released strategic reserves, including supplies of refined products, which analysts said played a vital role in cooling US gasoline prices.

Some have said the US should build up strategic stocks of gasoline, as well as of crude and heating oil.

Birol agreed there was an argument in favour of a US strategic gasoline reserve.

“Of course there is a case for building strategic stocks, but that would not solve the current problem of building refineries with the right specification,” he said.

Speaking on the sidelines of the International Energy Forum in Doha, which is bringing together representatives of producers and consumers, he said the oil business consumer nations could address the refinery shortfall and help with the task of bringing down high oil prices.

“There are things that the oil business can do. They can invest. They can adjust refineries and production,” he said.

He said current record prices should focus minds on seeking a consensus.

“We should be understanding each others anxieties and preoccupations and trying to address them,” he said.

“$75 is very bad for everybody, I believe, even including the producers.—Reuters