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I'm glad to see that my post generated some discussion. First, I acknowledge that under this administration, I'm more likely to get nominated to the Supreme Court than to see a $1 federal fuel tax. Moreover, I acknowledge that there already exist substantial fuel taxes.
However, a federal fuel tax - of say $1/gallon - would not subsidize big oil. In fact, over time, it would reduce the quantity produced. Oil production has basically reached its maximum possible level, yet world oil demand is now greater than what can be supplied. Hence the high prices. Moreover, demand seems to be inelastic, as the increase of price over time has not cooled demand.
This makes sense: you need to fill up the tank to get to work. People moan about price, but very rarely do something about it.
A sharp price increase, say that created by a tax, would change long term behaviors, which appear to be the only way to curb demand. People give up the SUVs and/or demand political action. And it also has the benefit of being a revenue source, and hopefully will be used to either (i) offset silly taxes, or (ii) worthwhile social projects. Provided that spending stayed the same, and there was a corresponding income tax setoff, people would end up paying the same amount in taxes. However, it also would encourage more reasonable consumption of oil.
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