Obama oil tax proposal would cost motorists

Consumers will likely pay the price for President Obama's proposed $10 tax per-barrel of oil, an administration official and a prominent analyst said Thursday.

Energy companies will simply pass along the cost to consumers, Patrick DeHaan, senior petroleum analyst for GasBuddy.com, which tracks gas prices nationwide, said in an interview with USA TODAY. 

Obama is set to propose the tax when he reveals his budget next week, as part of an effort to reduce carbon emissions and generate billions of dollars for mass-transit investments and self-driving vehicles. The new tax would be phased in over five years, and would apply to both domestic and imported oil.

"This is a per-barrel fee on oil paid for by oil companies," White House economic adviser Jeff Zients told reporters Thursday. "So they're the ones paying the fee. We recognize that oil companies will likely pass on some of these costs."

Although the tax is likely to run into political opposition from Republicans, it comes at the most politically expedient time possible: Rock-bottom oil prices could make the inevitable increase in gas prices that would follow a tax increase more palatable.

"Something like this would trickle down and be a $10 per barrel tax on motorists," DeHaan said. "This is not something oil companies are going to absorb."

That means a 15-gallon fill-up would cost at least $2.76 more per day.  It would also affect people who use heating oil to warm their homes and diesel to fill their trucks. But Obama will also propose a relief fund for families affected by higher energy bills. 

Of course, at a nationwide average of $1.77 per gallon on Thursday, gasoline is already cheap compared to historic highs. Environmentalists say a small price increase is worth it to help fight climate change and spur innovation.

Zients declined to elaborate on how the oil fee — which is different from a gas tax — would affect prices at the pump.  

DeHaan called it a "bold" proposal that would be the most significant change in energy policy in recent memory.

Oil stock investors did not appear to be fazed when the news hit Thursday afternoon. Shares of Exxon Mobil, Chevron and Shell all closed up for the day.

Stocks for Delta, United Continental, American Airlines and Southwest Airlines rose on Thursday, indicating that airline investors aren't fretting about the potential tax increase.