President Obama has proposed a $10 per barrel crude tax to fund new investments in transposition infrastructure.
The White House said on Thursday that it wants to impose a new $10 per barrel fee to be paid by oil companies that would be “gradually phased in” over five years.
The White House said the fee would be used to fund investments in “clean transportation infrastructure”and provide for the the long-term solvency of the Highway Trust Fund.
“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.
The proposal will be officially announced as part of Obama’s 2017 budget plan and is expected to boost federal transportation investment by nearly $20 billion per year above current spending levels.
News of the proposal was met with opposition from energy industry advocates.
President and CEO Jack Gerard of the American Petroleum Institute, a national energy industry trade organization, said the tax will raise gasoline prices and stifle energy industry growth.
“The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader,” Gerard said.
The proposal comes on the heels of one of the worst oil prices routs in years.
Crude prices have tumbled nearly 70 percent since the summer of 2014 and touched 13 year lows in January before bouncing back past the $30 per barrel mark earlier this month.