Now is the right time to create a new tax on oil, while gasoline prices are at historic lows, President Obama said Friday.
Speaking with reporters at the White House, Obama used the recent decision to lift the ban on crude oil exports to justify the $10-per-barrel oil tax proposal his staff unveiled Thursday.
“It’s right to do it now, when gas prices are really low,” Obama said in a speech largely focused on the unemployment rate, which is the lowest in eight years. “And they will be low for quite some time to come, so it’s not going to be a disruptive factor in terms of the economy.”
The proposal was roundly mocked by Republicans and the oil industry, who mostly refused to accept it as a serious idea.
Obama framed the tax as a trade-off now that the 40-year-old ban on crude exports has been lifted, in a major boon to oil producers.
“If we say to them, ‘Alright, oil companies, we know that you’re having to retool, we know that prices are low right now, you’re allowed to export,’ ” he said.
“But what we’re also saying is that we’re going to … impose a tax on a barrel of oil — imported, exported — so that some of that revenue can be used for transportation, some of that revenue can be used for the investments in basic research and technology that’s going to be needed for the energy sources of the future.”
Obama wants to use the oil tax to fund clean energy and transportation initiatives like research and technology.
He predicted that in a decade or two, the tax would bring the country significantly closer to weaning off of fossil fuels.
The American Petroleum Institute (API) said that the new tax would amount to 25 additional cents for a gallon of gasoline, which now averages $1.82 a gallon nationally.
West Texas Intermediate crude oil settled at $31.42 a barrel Thursday, about a third of its price a year and a half ago.
Republicans declared the idea “dead on arrival” in Congress, ripping it apart as a massive tax increase for the middle class and others who could not afford it.
But the White House disagreed. Press secretary Josh Earnest said the tax is “in the best interest of the economy.”