The White House moved yesterday to quell more dissension in the ranks over oil prices, dismissing a proposal to bail out domestic producers by levying an excise tax on imported crude and using the money to buy oil for the Strategic Petroleum Reserve.
"There is nothing like that under consideration," said Office of Management and Budget Director James C. Miller III. "It may be a gleam in the eye of some underlings."
In a televised interview, Treasury Secretary James A. Baker III also voiced doubt about the proposal, which has been under study by the administration, although he did not flatly reject it.
"The president has recently ruled out consideration of an oil import fee after initially saying he would consider it," Baker said on NBC's "Today" show. President Reagan was concerned about the overall economic effects of a fee on imported oil and "the same reasoning might apply" to the excise tax, Baker said.
Baker also attempted to quash continuing speculation that the administration is ready to intervene with Saudi Arabia in an effort to end the price war that began last year as a squabble among members of the Organization of Petroleum Exporting Countries.
"We're not in the business of sitting down with OPEC or OPEC members and talking about price levels for oil," he said.
The Washington Post reported yesterday that a special interagency task force was weighing a proposal to prop up marginal oil producers. The proposal, however, has not reached Cabinet level or gone to the president for a decision.
Amid the confusion over the administration's intent, oil prices edged upward yesterday after hitting single-digit lows earlier this week. West Texas Intermediate closed at $12.74 a barrel on contracts for May delivery on the New York Mercantile Exchange. The close was bolstered by Citgo Petroleum Corp.'s decision to raise the price it will pay for the benchmark domestic crude in the belief that oil prices have at least temporarily bottomed out.
In European markets, North Sea oil climbed into the $12-a-barrel range in the face of a threatened strike by oil-rig caterers that could shut down 900,000 barrels-a-day of production.
Industry representatives cited "a number of positive events" as the reason for the rally, despite the administration's insistence that it has not strayed from its free-market policy or opposition to new taxes on imported oil.
The idea of taxing oil imports to raise revenue for the Strategic Petroleum Reserve has long had adherents among economists, who consider the reserve inadequate to protect the nation from energy market disruptions. In recent weeks, the proposal has garnered support among administration officials and oil-state politicians who think that it could help keep marginal domestic producers afloat at a time of free-falling oil prices.
But Miller's comments yesterday suggested that the OMB has little interest in either an excise tax or the additional oil purchases that it would finance.
A high-level task force, including representatives of the National Security Council, is reviewing the the 500-million-barrel reserve to determine whether it should be increased. The investigation was initiated at the request of the Energy Department, which fears that the domestic oil slump will lead to increased reliance on imported oil.
"We are obviously aware of OMB's inclination," a DOE spokesman said yesterday. "All we've said is that we're looking at the issue."