US President Barack Obama has proposed a USD 10-a-barrel tax on crude oil to fund a new green transportation system, drawing criticism from the Republicans who said it would raise energy prices and hurt poor Americans.

The White House said Obama's budget to be sent to the Congress next week will lay out a bold new plan for building a 21st Century Clean Transportation System funded by a new fee paid by oil companies.

The President s plan would increase American investments in clean transportation infrastructure by roughly 50 percent while reforming the investments we already make to help reduce carbon pollution, cut oil consumption, and create new jobs.

The new fee on oil will also encourage American innovation and leadership in clean technologies to help reshape our transportation landscape for the decades ahead, it said.

Noting that the US needs a sustainable funding solution that takes into account the integrated, interdependent nature of our transportation system, the White House said travellers choose between walking, biking, driving, flying, and taking the train; and companies choose between trucks, barges, airplanes and rail lines.

"So to meet our needs in the future, we have to make significant investments across all modes of transportation.

And our transportation system is heavily dependent on oil.

That is why we are proposing to fund these investments through a new USD 10 per barrel fee on oil paid by oil companies, which would be gradually phased in over five years," the White House said.

"The fee raises the funding necessary to make these new investments, while also providing for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have," it said.

"By placing a fee on oil, the President's plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future," the White House said.

The move was immediately opposed by the Republican leadership in the Congress.

"Once again, the president expects hardworking consumers to pay for his out of touch climate agenda. A USD 10 tax for every barrel of oil produced would raise energy prices hurting poor Americans the most," said Paul Ryan, the Speaker of the House of Representatives.

"This announcement, the latest in a series of regulatory attacks on the energy sector, proves President Obama is still on a mission to destroy a major backbone of the US economy," he said, adding that the president should be proposing policies to grow our economy instead of sacrificing it to appease progressive climate activists.(PTI)