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.

China introduced consumption taxes on fuel products in April 2006. The government levied 30 percent of a planned 0.1 yuan per-liter tax for fuel oil and 0.2 yuan for naphtha that year to cushion the impact on prices and imports, the State Administration of Taxation said Feb. 22.

The tax increase will add to cost pressures on imports, Bizer Tang, chief analyst at Guangzhou Twinace Petroleum & Chemical Co., China's largest non-state-owned fuel oil importer, said Feb. 22.

Power plants and privately owned refineries in southern and eastern China are struggling to be profitable because of rising fuel oil costs, Tang said at the time. These producers, known as teapot refiners, use fuel-oil as feedstock to produce oil products.

Imported naphtha will be exempted from the tax with effect March 5 until 2010, the customs administration said in today's statement. Only the U.S. and Japan import more crude oil than China.

To contact the reporter on this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net.

Last Updated: March 13, 2008 01:25 EDT