BHOPAL: A day after the Union government slashed excise duty on petrol and diesel, Madhya Pradesh Chief Minister Shivraj Singh Chouhan on Thursday announced a four per cent cut in the Value Added Tax (VAT) and Rs 1.50 cut in the cess on the two fuels.
As a result, the price of petrol will come down to Rs 106.86 and that of diesel to Rs 90.95 per litre in the state capital Bhopal from Friday.
In a bid to give relief to the people despite financial constraints, the state government has decided to cut VAT on petrol and diesel by four per cent, an official release said.
Besides, chief minister Chouhan also decided to slash by Rs 2 and Rs 1.50 the cess on petrol and diesel, respectively, it added.
The prices of the two fuels, thus, will be reduced by Rs 7 per litre, it added.
The relief would leave a hole of Rs 1,948 crore in the state government's coffers during the remaining months of this fiscal, the release said.
The prices of petrol and diesel dropped by Rs 6.27 and Rs 12.49 per litre, respectively, in Bhopal on Thursday morning following the Centre's decision to cut excise duty, Bhopal Petrol Pump Dealers Association secretary Nakul Sharma had told PTI earlier in the day.
The prices of petrol and diesel fell to Rs 112.54 and Rs 95.39 per litre, he had said.
Opposition Congress had asked the BJP government to take a cue from other states and reduce the VAT on petrol and diesel.
Congress Rajya Sabha member Digvijaya Singh posted a tweet with the hashtag "Modi hai to mahangai hai", saying, "Thank you Modi-ji for Rs 5 reduction on petrol after raising the central excise tax by nearly Rs 35 per litre on petrol and diesel. Keep raising it from tomorrow."
Madhya Pradesh Congress spokesman Bhupendra Gupta had said the state government should also reduce VAT on the fuels as the BJP-ruled states of Uttar Pradesh, Goa, Karnataka, Uttarakhand and Tripura have done.
Even the BJP's ally JD(U) in Bihar had reduced the VAT on fuels, he had pointed out.