The American Petroleum Institute, the country's largest oil industry backed trade group, slammed the U.S. Senate as it readies to vote to eliminate tax breaks for oil companies.
A bill scheduled for a Monday night vote would remove billions in tax incentives to energy companies like Exxon Mobil (NYSE: XOM) and ConocoPhillips (NYSE: COP) for drilling costs that stem from survey work, ground clearing, salaries, maintenance and repairs in exploration and drilling projects.
The bill's sponsor is Sen. Robert Menendez (D-N.J.) and is co-sponsored by nine other senators,
President Barack Obama's 2013 budget calls for eliminating 12 tax breaks for oil, natural gas and coal companies.
Every time you fill up the pump, they're making money. They are doing just fine. They're not having any problems, said President Barack Obama last week on his energy tour.
The API's tax policy manager, Stephen Comstock called the bill politically motivated and claimed ending tax breaks would hurt the national economy.
Let's be clear, this proposal is not about lowering gasoline prices, Comstock said. The best you can say about this bill is that it is counterproductive,
Comstock said the oil and natural gas industry adds more than $86 million a day to federal coffers, and since 2000, had invested more than $2 trillion in U.S. capital projects to advance energy technology.
Opponents of the bill say the tax incentives are needed to help incentivize companies to invest in domestic energy to help reduce energy prices.
Proponents point to big oil company profits and that they can absorb the increased loses.
White House calculations estimate as much as $41 billion would be saved over the next 10 years.
The aim is to ensure that oil companies pay their fair share as drivers pay near-record gasoline prices.
The country's average retail price for gasoline was $3.89 per gallon, a penny higher than last week and 32 cents more than a year ago, the American Automotive Association said.
Gasoline traded Monday on the New York Mercantile Exchange at $3.39 per gallon.
Crude oil rose a penny $106.88 per barrel on the Nymex.