June 20 (Bloomberg) -- Crude oil was little changed in New York after falling more than $4 a barrel yesterday as fuel price increases in China may reduce demand for diesel and gasoline.

The world's second-biggest energy consumer will increase gasoline and diesel prices by as much as 18 percent as of today, the country's National Development and Reform Commission said. The U.S. Energy Department in a report on June 10 said China's oil consumption is expected to rise 440,000 barrels to an average 8.02 million barrels a day this year.

``Anything that will impact on their demand is relevant to the supply-demand balance in the oil market, particularly as it's a growing part of the equation,'' said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. ``It will help temper prices in the longer run.''

Crude for July delivery was at $132.17 a barrel, up 24 cents, in after-hours electronic trading on the New York Mercantile Exchange at 12:44 p.m. Singapore time. Prices had fallen as much as 74 cents, or 0.6 percent, to $131.19 a barrel today.

Yesterday, the contract dropped $4.75, or 3.5 percent, the biggest decline since March 31. Futures climbed to a record $139.89 on June 16. Prices are 91 percent higher than a year earlier.

Brent crude oil for August settlement was at $132.45 a barrel, up 45 cents, on London's ICE Futures Europe exchange at 12:26 p.m. Singapore time. Earlier, prices were down 52 cents, or 0.4 percent, to $131.48 a barrel.

China Prices

China will raise jet-fuel prices by 1,500 yuan a ton, or 25 percent, the top policy planner said. On July 1, China will increase electricity prices by an average 0.025 yuan a kilowatt- hour, or 4.7 percent. The nation will impose temporary caps on thermal-coal prices until the end of this year.

China consumed about 9 percent of the global oil demand in 2007, according to the BP Statistical Review. The U.S. used 24 percent.

The government is considering a so-called environmental tax, a new levy on auto fuels and changes to existing taxes on natural-resource use, Fu Jing, deputy director of policy and legislation at the State Administration of Taxation, said at the Energy Efficiency Asia conference in Beijing yesterday.

Pent-Up Demand

India, Malaysia, Indonesia and Taiwan have increased fuel prices and reduced subsidies this year, a move that may cut Asian demand and slow global oil-consumption growth.

China's increase in fuel prices may have a limited impact on crude demand as refiners increase their operations, said Victor Shum, senior principal at consultants Purvin & Gertz Inc. in Singapore.

The fixed price at which refiners were allowed to sell fuel in China was less than the cost of the oil they purchased on the international market. This negative processing profit reduced their incentive to produce gasoline and diesel and has created some shortages at filling stations.

``The negative impact on demand will be muted,'' Shum said. ``The Chinese refiners have been less than enthusiastic about producing fuels. With more fuel supplies expected from the Chinese suppliers, the pent-up demand from consumers will be more easily met.''

To contact the reporter on this story: Christian Schmollinger in Singapore at Christian.s@bloomberg.net

Last Updated: June 20, 2008 01:09 EDT