Exxon's Profit Surges To First-Quarter Record On Higher Gas Prices

Exxon Mobil, the world's biggest oil company, said profit climbed 10 percent to a first-quarter record after higher gasoline and diesel prices increased refining profit.

Profit rose to $9.28 billion from $8.4 billion in the comparable period a year earlier, the Irving, Tex., company said in a statement yesterday. Revenue fell 2 percent, to $87.2 billion.

Refining profit rose 50 percent, as the company increased fuel output at its 45 plants and as growing demand and breakdowns held back competing producers. U.S. gasoline prices may climb to a record this year, especially if labor disputes in Europe hurt fuel shipments to the East Coast, said Paul Sankey, an analyst at Deutsche Bank in New York.

"Gasoline and diesel demand are up, and we're seeing that at the pump," said Barry James at James Investment Research in Xenia, Ohio.

U.S. gasoline demand rose 1.7 percent in the first quarter, more than twice the rate of growth in the corresponding period a year earlier, Energy Department data showed. The average U.S. profit margin on refining rose 37 percent, to $12.43 per barrel of oil processed. Exxon Mobil refines twice as much crude oil as it pumps from wells.

Rising gasoline prices and high oil-industry profits spurred eight Democratic senators to introduce legislation yesterday that would impose a 50 percent tax on profits when oil prices top $50 a barrel. Kenneth Cohen, Exxon Mobil's vice president for public affairs, said the measure would hurt the economy, lower domestic oil output and inflate pump prices.

"It's been tried before in this country, and it didn't work," Cohen said.