Accusing President Bush of having a "sweetheart relationship" with Saudi Arabia, Democratic presidential candidate John Kerry on Monday described as "disgusting" a report that the Saudis had promised the president to lower oil prices before the November vote.

Kerry was responding to an allegation by reporter Bob Woodward that Saudi Ambassador Prince Bandar bin Sultan had promised Bush that his country will increase oil output in the months before the election -- which would have the effect of driving down U.S. gasoline prices and giving the Bush re- election campaign a big boost.

"If ... it is true that gas supplies and prices in America are tied to the American election, tied to a secret White House deal, that is outrageous and unacceptable to the American people," Kerry said during a campaign stop in Florida.

Woodward's new book about the Iraq war, "Plan of Attack," quotes Bush as saying "I'm worried about the capacity of the oil market" after an invasion of Iraq and asking about Saudi Arabia's ability to increase production. Woodward writes that Bandar said his country "hoped to fine-tune oil prices over 10 months to prime the economy for 2004."

"What was key, Bandar knew, were the economic conditions before a presidential election," Woodward wrote, "not at the moment of the election."

The Saudis denied the report, and White House spokesman Dan Bartlett told CNN, "There was no secret deal."

At a press conference earlier in the day, however, another White House spokesman, Scott McClellan, did not directly answer 14 questions put to him by reporters about whether such a deal existed.

McClellan said only that Bandar had visited the White House on April 1 and pledged to take actions to ensure that crude oil prices remain between $22 and $28 a barrel.

"We've made our views very clear that prices should be determined by market forces, and we are always in close contact with producers around the world on these issues to make sure that actions aren't taken that harm our consumers or harm our economy," McClellan said.

Bandar on Monday called Woodward's report "not true."

He said gasoline prices are rising because of inadequate U.S. refining capacity rather than tight oil supplies. "It doesn't matter how much oil we produce today," he said. "You cannot refine enough."

Bandar's family is close to the Bush family, and the prince is reportedly the only diplomat in Washington who has regular access to the Oval Office. However, he is known to be more pro-American than other members of the royal family, and some of his previous promises have been overruled at home.

Woodward's accusations pack extra punch because of soaring gasoline prices across the nation. Prices are at an all-time high nationwide, the Energy Department announced Monday, with a national average of $1.81 per gallon for regular -- a 30-cent increase so far this year. The average price in California, where air-quality rules impose higher refining costs, is $2.15 per gallon, the department said.

Some private experts are predicting that the U.S. average will rise to as much as $3 per gallon this summer, noting that stocks are at the lowest levels in 30 years for this time of the year. "The gasoline market is now on the precipice of a serious supply problem," Barclays Capital said in a recent report.

The combination of the soaring prices and Woodward's allegations could provide a significant boost for Kerry's campaign.

"Right now, there are people all over this country who are literally going through their purses and their pocketbooks -- looking behind the sofa, under the cushions -- to find the pennies and the extra money to be able to pay the additional costs of gasoline," the Massachusetts senator said Monday.

"They are giving up choices for their kids, giving up choices for their families to pay the extra $30-$50 a week in order to be able to pay for gas. Those aren't Exxon gas prices we see. ... those are Halliburton prices, and we deserve a break in this country."

Halliburton is the Texas-based oil services corporation that was run by Vice President Dick Cheney from 1995 to 2000 and is now the leading contractor for the U.S. military in Iraq. The company has been accused of overcharging the military $61 million for gasoline delivered to Iraq under a no-bid contract.

In recent months, Kerry has advocated a broad switch of U.S. energy policy, saying the Bush administration's emphasis on drilling more oil at home and abroad should be replaced with programs to conserve fuel and reduce American dependence on imported oil.

Kerry said Monday that he has his own plan for lowering gas prices. "And you know what the No. 1 priority of that plan was? Put pressure on the Saudis to increase production and lower the prices to America," he said.

Kerry suggested that the deal reported by Woodward shows that the administration is coddling the Saudis and other Arab oil producers that are suspected of serving as sources of funds for terrorist groups.

Kerry pledged to end "this sweetheart relationship with a bunch of Arab countries that still allows money to move to Hamas, Hezbollah and the Al Aqsa Brigade."

©2004 San Francisco Chronicle

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