Reuters
Published Feb 04, 2016 05:59PM ET
Obama to seek new tax on oil in budget proposal
By Ayesha Rascoe and Valerie Volcovici
WASHINGTON (Reuters) - U.S. President Barack Obama will launch a long-shot bid next week to impose a $10-a-barrel tax on crude oil that would fund the overhaul of the nation's aging transportation infrastructure, the White House said on Thursday.
The proposed fee, which would be paid by oil companies and phased in over five years, was quickly met with scorn by lawmakers in the Republican-controlled Congress.
In the last year of his presidency, Obama has said the country must stop subsidizing the "dirty" fossil fuels of the past and focus on clean, renewable fuels that do not exacerbate climate change.
"By placing a fee on oil, the President's plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future," the White House said in a statement.
Set to be officially announced in Obama's fiscal 2017 budget plan on Tuesday, the fee would provide nearly $20 billion a year to help expand transit systems across the country and more than $2 billion a year to support the research and development of self-driving vehicles and other low-carbon technologies.
Republican lawmakers, who have repeatedly clashed with the Obama administration over energy policy, panned the proposal on social media. House of Representatives Majority Whip Steve Scalise asked on Twitter (N:TWTR) whether the proposal was "Obama's worst idea yet?"
The $10 tax would come at a time of tumbling oil prices.
Oil prices fell last month to below $30 a barrel, the lowest level since 2003, as demand fails to keep pace with a glut of new supply and the world’s biggest oil producers resist cutting production.
"At a time when oil companies are going through the largest financial crisis in over 25 years, it makes little sense to raise costs on the industry," Neal Kirby, a spokesman for the Independent Petroleum Association of America, said in a statement.
Kirby said the tax would ultimately be passed along to U.S. consumers, who have benefited from low gasoline prices.
Jeff Zients, director of the White House National Economic Council, pushed back against assertions the oil tax would place U.S. crude producers at a disadvantage. He told reporters on a call that the fee would be applied to domestically produced and imported barrels of oil but not to crude exported from the United States.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.