U.K. STUDY GROUP FINDS CLINTON PLAN UNFAIRLY HITS OIL

President Clinton's energy tax proposals are unfair in singling out oil for an extra increase.

So says the Centre for Global Energy Studies (CGES), London, which figures oil will be hit with a tax of 34.1cts/MMBTU on top of the 25.7cts proposed for all fossil fuels and nuclear power.

"The average tax on oil in the U.S. amounted to $8/bbl in 1990, compared with $25-65/bbl in Europe," CGES said. "However, taxes on oil, even in the U.S., are much higher than on other fuels, which are not taxed at all or even subsidized in many Organisation for Economic Cooperation and Development (OECD) countries."

The new U.S. government believes oil consumption is not particularly sensitive to price increases, CGES said.

"The CGES does not share this view. In a recent study of the effect of prices on oil demand in 23 OECD countries, oil consumption is found to be much more sensitive to price increases in the long run than most governments are willing to concede.

"The study showed that, in 1990, oil consumption in the OECD as a whole would have been higher by no less than 15 million b/d, or 40%, had the current taxes on oil never been levied."

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