Petrol will be cheaper by Rs 2 and diesel by Re 1 per liter across Maharashtra from midnight.

Maharashtra has highest rate of VAT on petrol and diesel. (Photo: PTI)

Mumbai: Petrol will be cheaper by Rs 2 and diesel by Re 1 per liter across Maharashtra from midnight on Tuesday after the state government reduced the value-added tax (VAT) on the fuels.

Making the announcement about VAT reduction on petrol and diesel on Tuesday, Finance Minister Sudhir Mungantiwar termed it as a "Diwali gift" to people of the state.

The revised rates will be applicable from midnight today, he said.

"The chief minister has approved a proposal to reduce the VAT on petrol and diesel by Rs 2 and Re 1 a litre, respectively. This is our Diwali gift to the masses," Mungantiwar told PTI.

He said the decision will cause an annual revenue loss of Rs 2,000 crore to the state exchequer.

"The government is ready to bear the additional financial burden despite Maharashtra's economy not being in a good shape," he said.