China Raises Fuel Oil Tax to Help Curb Energy Use

March 13 (Bloomberg) — China, the world’s third-largest buyer of crude oil, increased the consumption tax on imported fuel oil by more than fourfold on March 5 as part of efforts to limit energy use.

The levy rose to 0.1 yuan ($0.014) a liter from 0.03 yuan, the Beijing-based Customs General Administration of China said in a statement on its Web site today. Fuel oil is burned by power plants and processed into gasoline and diesel by privately run refineries.

China will try to accelerate the pace of efficiency gains this year to meet a target of cutting the energy used in each unit of gross domestic product by 20 percent in the five years ending 2010. The customs administration pushed back the effective date of the increase from the Jan. 1 start announced by tax authorities last month.

“It’s unfeasible to start levying higher taxes in January when the policy was only issued in February,” said Tang Chaozhang, a fuel oil trader at Guangdong Zhenrong Energy Co.

Bloomberg