Date
23 September 2017
Obama's tax proposal on oil is likely to meet stiff opposition from Republican-controlled Congress. Photo: Reuters
Obama's tax proposal on oil is likely to meet stiff opposition from Republican-controlled Congress. Photo: Reuters

Obama to propose new tax on oil in budget plan

US President Barack Obama is set to propose a US$10-a-barrel tax on crude oil in budget plan next week as the administration seeks to support investments in clean transportation projects.

The proposed fee would be paid by oil companies and phased in over five years, Reuters reported.

“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 was quoted as saying in a statement.

The fee, to be announced in Obama’s fiscal 2017 budget plan on Feb. 9, will provide nearly US$20 billion a year to help expand transit systems across the US and more than US$2 billion a year to support the research and development of self-driving vehicles and low-carbon technologies.

Republican lawmakers, who have repeatedly clashed with the Obama administration over energy policy, panned the proposal.

House of Representatives Majority Whip Steve Scalise asked on Twitter whether the proposal was “Obama’s worst idea yet?”

The US$10 tax would come as oil prices have fallen to the lowest level since 2003.

“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, was quoted as saying.

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RC

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