President-elect Barack Obama has shelved his proposal to impose a windfall profits tax on oil companies now that prices have fallen from record levels earlier in the year, according to a transition aide.

Obama in August called for the government to give consumers an immediate $500 rebate which would have been paid for by taxing oil companies on their windfall profits as oil surged above $100 a barrel.

As the price of oil began falling below $80 a barrel amid a global economic slowdown, the tax idea was quietly dropped. Obama did not include revenue from a windfall profits tax in the middle-class rescue plan he introduced mid-October, said the aide, who spoke on condition of anonymity.

The shift was reported Wednesday by the Houston Chronicle.

Oil hit a record $147.27 a barrel on July 11, the highest since trading began in 1983. Crude oil for January delivery closed at $46.79 a barrel today, the lowest since Feb. 9, 2005. A recession in the United States has prompted a drop in demand. Consumption averaged 19.6 million barrels a day last week, down 5.7 percent from a year earlier, according to an Energy Department report.

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