The new rates of petrol and diesel will come into effect from Tuesday morning.
Amaravati: Andhra Pradesh Chief Minister N Chandrababu Naidu on Monday announced a reduction of tax on petrol and diesel by Rs 2 a litre each, in the state.
The announcement, which came amid nation-wide Bharat Bandh protests called by Congress and opposition parties against the rise in fuel prices and depreciation of the rupee, was made in the state assembly.
"The central government has been imposing a heavy burden on people by steeply increasing the prices of petrol and diesel despite heavy income in the form of various levies and dividends. Though the state is faced with a deficit budget, we have decided to reduce the tax and ease the burden on people," Naidu was quoted as saying by news agency PTI.
The state would have to forego revenue of Rs 1,120 crore due to the measure, he added.
The Andhra Pradesh government is currently levying 31 per cent Value Added Tax plus Rs 4 as additional tax per litre of petrol and diesel. The additional tax component is now being reduced to Rs 2 a litre, a senior official of the Commercial Taxes Department said separately.
Consequently, the price of petrol is expected to come down to Rs 84.71 a litre and diesel Rs 77.98 from Tuesday morning when the tax cut comes into effect.
Naidu had earlier criticised the Centre over continues fuel price hike and said that soon petrol and diesel would be sold at a whopping Rs 100 per litre and the rupee will further fall to Rs 100 against US dollar.
(With PTI inputs)