As part of an effort to reduce carbon emissions and increase and boost revenue for mass-transit investments and self-driving vehicles, President Barack Obama has proposed a $10 tax per barrel of oil. However, Illinois’ oil industry says consumers will feel the increased cost. The proposed tax would apply to both domestic and imported oil, and be phased in over the next 5 years. The Obama administration said the plan is the president’s latest attempt to reduce the nation’s dependence on oil and create an incentive to invest in “clean energy technologies that will power our future.” Last August, President Obama and the United States Environmental Protection Agency (EPA) announced the Clean Power Plan designed to significantly reduce carbon dioxide emissions from America’s power plants. But the President’s proposed plan may have trouble getting approved by the Republican-controlled Congress. Energy companies say President Obama’s proposed $10 tax per barrel of oil will most likely trickle down to consumers. Bill Fleischli, Executive Vice President of Illinois Petroleum Marketers Association/Illinois Association of Convenience Stores, said he believes leaving the gas prices alone mutually benefits the consumer and the government. “I think if they leave it alone things will get better not only for the consumer but also for the government,” Fleischli said.
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Fleischli also said the oil industry has been battling increased prices for the past 7 or 8 years, and that with each price hike, allegations of price gouging have plagued the industry. “When your costs go up and your margins don’t go up that means you get into a death spiral,” Fleischli said. With the current price of oil, a $10 tax on a barrel would result in a 33 percent increase in the price of oil, according to Fleischli. Although energy companies say the fee will most likely trickle down to consumers, environmentalists believe the small increase is worth the sacrifice to combat climate change. The tax would not only affect motorists, but would also affect people who purchase heating oil to warm their homes. To assist such families, Obama is expected to propose a relief fund to compensate families for higher energy bills. The proposed federal budget is for the 2017 fiscal year and would take in effect in October.