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Clinton urges oil firms to pass along savings

WASHINGTON: President Bill Clinton on Wednesday congratulated Opec for deciding to pump more oil into the world market, and urged gasoline retailers to swiftly pass on cheaper oil costs to American motorists.

The White House, which has been criticised for what Iran called heavy-handed lobbying of Opec members, hailed the new pact increasing oil production by seven percent as a big win for consumers and the world economy.

"These increases should bring lower prices, which will help to sustain economic growth here in America and also, and very importantly, throughout the world," Clinton said at a rare formal news conference.

Those savings should be passed along the oil supply chain quickly so that motorists benefit, he added.

"While home heating costs and the price at the pump are both expected to fall in the next few weeks, I urge the oil companies to do everything they can to bring the savings to consumers as quickly as possible," Clinton said.

The US pump price for gasoline now averages just under $1.51 a gallon, about one-third of what motorists pay in Europe and other nations.

Earlier, the White House said it saw no reason to apologise for what Iran says was US interference with the Organisation of Petroleum Exporting Countries.

"We think we made our case very effectively. Obviously others can take a different view, but we thought that it was in the worldwide economic interest to have more stable oil prices, and we will not shrink from making that argument," White House spokesman Joe Lockhart told Reuters.

"Everybody in Opec agreed, except for Iran," he said.

Relations between Tehran and Washington have been warming after more than two decades of enmity.

Lockhart said there was no need for Washington to present Tehran with some sort of olive branch to preserve that thaw, since Washington had made moves recently including relaxing some trade sanctions against Iran less than two weeks ago.

The Opec decision followed an aggressive US campaign that included telephone calls by Clinton to heads of Opec and non-Opec oil producing countries and lobbying trips by US Energy Secretary Bill Richardson.

The White House is under heavy election-year pressure to do something about rising prices for home heating oil and for gasoline -- prices which remain far cheaper than in most other industrial countries.

The Clinton administration hailed the Opec decision as a major diplomatic victory. Richardson spent much of Tuesday night making telephone calls of thanks to oil producers, Lockhart said.

The new Opec pact also means a Republican-backed proposal to repeal a portion of the federal gasoline tax is not needed, Clinton said.

Senate Majority Leader Trent Lott has scheduled debate beginning on Thursday on the gasoline tax rollback plan.

"I don't expect it to reach my desk because there seems to be bipartisan opposition to it," the president said. "I'm not sure the savings would be passed through to the consumer."

Iran, after refusing to take part in the formal agreement out of anger over the US lobbying campaign, said on Wednesday it would increase crude output to maintain its market share.

"The US intervention was beyond expectations. Never in the history of Opec has this been experienced before," Iran's OPEC governor Hossein Kazempour Ardebili told reporters in Vienna, where the cartel met.

The United States and Iran have not had diplomatic relations since 1979 after Iranian students seized the US embassy in Tehran in the aftermath of the Islamic revolution.

Republicans, who control Congress, have shown no interest in Clinton's proposals to create a home heating oil reserve in the Northeast, offer new tax incentives to encourage development of alternative energy, and reauthorize the legal authority for the Strategic Petroleum Reserve.

Many Republicans, including Texas Gov. George Bush who is the party's presumptive presidential nominee, favour opening an Alaskan wildlife refuge and other lands for exploration.

US Sen Jesse Helms, a North Carolina Republican and chairman of the Senate Foreign Relations committee, said the United States had been forced to "grovel at the feet of oil ministers because the president and the vice president won't stand up to environmental extremists."-Reuters