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Obama proposes tax rise to tackle oil spills

The move is part of a bill initiated by the White House that seeks to raise the cap on natural resou

The US president Barack Obama has proposed a tax rise of one cent per oil barrel as part of a $118m spending plan to aid clean-up operations and compensate victims of the 20 April Gulf of Mexico oil spill.

The tax hike will add $500m (£340m) over ten years to the Oil Spill Liability Trust Fund, which will cover some of the damages.

President Obama stressed that he "will not relent in pursuing full compensation from the responsible parties for the expenses it has incurred and for the damage caused by the spill".

The move is part of a bill initiated by the White House in the US Congress that also seeks to raise the cap on natural resource damages from $500m to $750m.

Senate committee hearings on the spill began on Wednesday, with officials from BP and Transocean - the companies responsible for the Deepwater Horizon rig that exploded - being grilled about their role in the disaster.