The Chhattisgarh's BJP government reduced the value added tax (VAT) on diesel and petrol by Rs 2.5 per litre on Thursday.
The decision followed the Centre's move to cut the prices of petrol and diesel by Rs 2.5 per litre, thus ensuring a total benefit of Rs 5 to the consumer.
"We are reducing 4 per cent VAT on both petrol and diesel, effectively reducing the price by Rs 2.5 per litre for petrol and diesel," a state public relations department official said in a statement.
"The state will incur a loss of Rs 378 crore for the remaining period of this financial year because of this reduction," he said.
Describing the cumulative relief of Rs 5 as "Oont ke munh me jeera" (an insignificant amount, a drop in the ocean), state Congress's senior spokesperson Ramesh Warlyani said, "The decision has been taken in view of people's anger against the ruling BJP and the coming Assembly polls.
"Fearing the outcome of upcoming assembly polls, the Narendra Modi government at the Centre has marginally reduced prices, but people will not be fooled," he said.
Going by the prices of crude in the international market, the prices of petrol and diesel should be not more than Rs 50 and Rs 45, respectively, Warlyani claimed.