Oil Refining Industry Federal Tax

A key oil-refining industry organization is opposing a provision in a Senate bill that would quintuple a federal tax specifically used by agencies to clean up oil spills because it would increase fuel costs for consumers. Senate Democrats brought up a measure that would couple a fivefold increase in the tax oil companies pay into a spill fund with help for the jobless, doctors, and cash-starved states.

The National Petrochemical and Refiners Association sent a letter to Senators Harry Reid (D., Nev.) and Mitch McConnell (R., Ky.) opposing a provision that would increase the Oil Spill Liability Trust Fund tax from 8 cents a gallon of crude oil to 41 cents a gallon. The bill passed by the U.S. House of Representatives on May 28 had increased the tax to 34 cents a gallon, which NPRA didn't oppose.

NPRA didn't oppose the tax 34-cent tax increase passed by the U.S. House of Representatives on May 28 to ensure that the fund was adequately financed to respond to future oil spills, said Charles Drevna, president of the refining-industry organization. This provision was passed as part of a broader jobs bill that extended unemployment benefits and various tax incentives.

Even with those levies on investment fund managers, oil companies, and some international businesses, among others the measure would add about $80 billion to the deficit over the next decade.