In Power and Market, Rothbard has this to say about excise taxes i.e. taxes levied on a particular good such as oil:
“The partial excise tax is a sales tax levied on some, rather than all, commodities. The chief distinction between this and the general sales tax is that the latter does not, in itself, distort productive allocations on the market, since a tax is levied proportionately on the sale of all final products. A partial excise, on the other hand, penalizes certain lines of production. The general sales tax, of course, distorts market allocations insofar as government expenditures from the proceeds differ in structure from private demands in the absence of the tax. The excise tax has this effect, too, and, in addition, penalizes the particular industry taxed. The tax cannot be shifted forward, but tends to be shifted backward to the factors working in the industry. Now, however, the tax exerts pressure on nonspecific factors and entrepreneurs to leave the taxed industry and enter other, nontaxed industries. During the transition period, the tax may well be added to cost. As the price, however, cannot be directly increased, the marginal firms in this industry will be driven out of business and will seek better opportunities elsewhere. The exodus of nonspecific factors, and perhaps firms, from the taxed industry reduces the stock of the good that will be produced. This reduction in stock, or supply, will raise the market price of the good, given the consumers’ demand schedule. Thus, there is a sort of “indirect shifting” in the sense that the price of the good to consumers will ultimately increase.”
In short, Rothbard argues that introducing or increasing an excise tax on a good will only put the price up by driving suppliers out of the market and therefore reduce the supply. He denies that placing a tax on a particular good will cause a company to increase the price of the good so that the consumer has to pay extra to cover the tax. However, this theory seems to be contradicted by varying oil prices.
This link (http://www.opec.org/home/PowerPoint/Taxation/taxation.htm) shows) shows that oil prices are highest in the UK where the tax on fuel is highest. This hasn’t come about due to the UK tax causing a decline in oil producers and supply as the UK gets its oil from the same companies and locations as other countries.
So was Rothbard wrong or have I misinterpreted the data?