Richard Branson, chief of Britain's Virgin Group, said on Tuesday he was interested in building an oil refinery in an attempt to cut airline fuel prices.

Branson's comments, in an interview on financial news network CNBC, come a week after his Virgin Atlantic Airways raised fuel surcharges for the second time in four months to make up for rising oil prices.

"We are actively looking at building a refinery," he said. "If we don't start now to get more refineries built, then fuel prices could literally rocket to USD$100-$200 (per barrel of oil) and the world economy would come to a grinding halt."

Branson did not give any specifics of a project, which has been the subject of speculation in Europe for some time.

"We are reasonably far down the line," said Branson, whose Virgin empire ranges from air travel and mobile phones to music and financial services. "We most likely won't do it ourselves. We're talking about a USD$2 billion investment -- we're willing to put the money in and we're trying to encourage other airlines to put money in as well. It's a great way of hedging against fuel prices."

After Hurricane Katrina damaged US Gulf Coast oil operations, Branson said the shortage of capacity to refine oil globally needed to be tackled soon.

"I hope that three or four years from now we will have contributed to at least getting one refinery built. But actually the world needs 10-12 new refineries to be built as soon as possible," Branson said in the interview.