Price for Gas Could Rise if Bill Passes

WASHINGTON — The head of the Senate energy panel proposed a tariff Thursday that could hike the price of imported oil 20%, sending crude prices soaring in frenzied trading.

The aim of the bill is to raise government revenue, cut consumption and boost domestic production.

In a stampede to buy on the New York Mercantile Exchange, March crude oil climbed as much as $1.09 to $20.75 a barrel before profit taking set in, trimming the rise to 75 cents, at $20.41 a barrel.

The bill, introduced by Sen. Bennett Johnston (D-La.), would set a floor of $25 a barrel on imported oil by imposing a fee that would bring the price up to that level.

Although Johnston did not say exactly how the fee would be set, refiners now pay an average of $21 a barrel for imported oil, including shipping and other costs, one economist said. If the bill were passed now, the government could get another $4 from refiners to hit the $25 target.

On that basis, the proposed import fee would add about 10 cents to the pump price of a gallon of gasoline and a quarter of a percentage point to the consumer price index, said the economist, David Wyss of DRI/McGraw Hill.