Jaipur (Rajasthan): Rajasthan Chief Minister Vasundhara Raje on Sunday announced a 4 per cent reduction in Value-added tax (TAX) on petrol and diesel which will be applicable from midnight today. The 4 per cent reduction in VAT will deduct the petrol and diesel prices by Rs 2.5 per litre in Rajasthan.

The VAT on petrol will be reduced from 30 to 26 per cent and on diesel from 22 to 18 per cent, Rajasthan Chief Minister Raje announced at a public gathering in Rawatsar in Hanumangarh district. The decision will cost the exchequer Rs 2,000 crore and will provide the people a relief of Rs 2.5 per litre on petrol and diesel.

“We have decided to reduce VAT on diesel and petrol by 4 per cent, which will provide much-needed relief to the people of the state, be it farmers or women or others,” Raje told reporters in Rawatsar after making the announcement.

The announcement has come at a time when the petrol and diesel prices set new records on Sunday. The high cost of global crude oil and a weak rupee took the petrol price in Delhi to a record Rs 80.50 per litre. The diesel price in Delhi rose on Sunday by 10 paise to Rs 72.61 per litre. The prices of both petrol and diesel have been rising for around a week now.

As the petrol and diesel prices have continued to surge, the Congress party called for a ‘Bharat Bandh’ on Monday to protest against it and the falling value of the rupee against the dollar. Congress leader Ajay Maken said the party wants petrol and diesel to be brought under the Goods and Services Tax (GST), which would decrease the price by Rs 15-18.