Obama proposes $10/bbl US oil levy

US oil exploration and production companies would be asked to pay a tax of $10 (£6.85) on every barrel they extract under a proposal by President Barack Obama due to be announced next week.

The White House said the tax would raise $20bn per annum to expand "national transit systems and invest in low-carbon technologies."

"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," a spokesperson added.

However, the proposal is highly unlikely to make it through the Republican-controlled Congress. It would also be unpopular with many voters, as adding $10 to the cost of oil production, would drive up the cost of gasoline at the pump.