The Obama Administration ratcheted up its demands on Wednesday that BP PLC cover all costs stemming from the Gulf of Mexico oil spill, including millions of dollars in salaries of oil-industry workers laid off because of the federal moratorium on deepwater drilling.

The sudden increase in BP's potential liabilities—along with growing evidence that even more oil than expected is gushing from BP's crippled well—helped send BP's shares plummeting almost 16% in New York, to $29.20. The stock has lost close to half its value, more...