PARIS - France's main consumer group, UFC Que Choisir, on Tuesday urged major oil companies to increase their European refining capacity to lower the share of their soaring refining margins in retail prices of diesel.

Another option is for the European Union to manage diesel stocks to ease tight markets, the consumer group said.

It forecast that European refining capacity would grow by only one percent in the next five years while it expected demand to surge by five percent in the same period.

"It's not in the interest of oil majors to invest in more capacity because this would lower their refining margin," Alain Bazot, the head of the consumer group, told reporters.

"This is a wonderful market for them," he added.

While Europe consumes almost twice as much diesel as gasoline, it imports diesel from countries such as the United States and exports the surplus of gasoline it produces.

In the past 12 months, French prices of diesel have jumped by a record of 15 percent, much more than the price of gasoline, which has risen by eight percent, the group said.

"The difference in the progression of price between the two fuels comes entirely from the refining margin," the group added.

The group calculated that the share of refining margins in the total retail diesel price in France had grown from 5 percent in the first half of the decade to 9 percent in 2008.

"Even if it doesn't weigh that much in the total price, it's something that we can act on," said Francois Carlier, the group's deputy head of studies.

Most of Europe's recent or planned refinery upgrade projects have focused on adding capacity to produce more middle distillate fuels such as diesel and heating oil.

But the expansion has been lagging behind a rise in diesel demand due largely to the increasing popularity of diesel cars at the expense of gasoline vehicles.

Europe still has to import distillate fuel to meet about 8 percent of local demand.

Some analysts have said the perpetually tight diesel supply has kept retail prices relatively high. Others, however, have said buying diesel from overseas might be a cheaper option for European refiners than investing in new refining capacity.