Republicans in the U.S. Senate have blocked a proposal to raise taxes on oil companies.

The plan's Democratic party supporters said it would have boosted taxes on oil companies that failed to invest in alternative energy, ended tax breaks for large oil firms, and reduced speculation in oil markets.

But Tuesday, Democrats failed to get enough votes to overcome Republican resistance to considering the bill. Republicans argued that raising taxes on oil companies would bring even higher energy prices.

The soaring cost of imported oil pushed the U.S. trade deficit in April to the highest level in more than a year.

A government report Tuesday shows the difference between what Americans sell abroad and what they buy from foreign nations grew nearly eight percent to a total of nearly $61 billion for the month.

Soaring oil costs are worrying the head of the U.S. central bank. Late Monday, Federal Reserve Chairman Ben Bernanke said the threat of inflation is growing, while the threat of an economic downturn remains, but is declining.

Investors interpreted his remarks as a signal that the Fed has finished its long series of interest rate cuts and will hold rates steady for now, and may increase them later this year.

The Fed has been trying to boost economic growth by cutting rates, but must balance the need for economic stimulus with concern that cutting rates too much will increase inflation.

Some information for this report was provided by AP and Reuters.