Congress Reinstates Oil Spill Liability Tax

March 24, 2006

Congress reinstated the tax with passage of the energy bill last summer.

The tax will be reinstated on April 1, 2006 at a rate of 5 cents per barrel. The tax is imposed at the refiner level and paid by the refiners.

However, marketers may see the tax passed on and possibly noted on invoices as a tax at a rate of $.0012/gallon for petroleum products, with some refiners reducing the rate slightly for blends made with alternative fuels (such as ethanol and bio-diesel).

For more information about how refiners are handling this tax, marketers should check directly with their suppliers.

Marketers are not required to have a separate line item on their invoices noting this tax and there are no parties exempt from or eligible for refunds of this tax.

Source: Petroleum Marketers Association of America (PMAA).