Chhattisgarh government on Monday has announced a 2% reduction in VAT on diesel and a 1% reduction on petrol. The government will incur a loss of around Rs 1000 crores, news agency ANI reported.

This decision was taken during the cabinet meeting chaired by Chief Minister Bhupesh Baghel, a government official told ANI.

“Providing major relief to the people of the state. Chief Minister Bhupesh Baghel-led cabinet has decided to cut the prices of petrol and diesel. VAT on diesel and petrol has been reduced by 2 per cent and 1 per cent respectively. The state government will bear the loss of about Rs 1,000 cr..” the Chief Minister’s Office (CMO) tweeted.

The decision comes after the Central government reduced the excise duty on petrol and diesel prices by Rs. 5 and Rs10 respectively. 

Talking to the media on Saturday, minister TS Singh Deo had said that the state’s chief minister had asked him to explore the possibilities to reduce VAT so that the people of the state may avail the benefit of reduced prices. 

Earlier, chief minister Bhupesh Baghel had also mentioned that prices of petrol and diesel could be reduced to Rs 60 if the central government withdrew the hiked excise duty on fuel.