In a big relief to commoners, Finance Minister Arun Jaitley today announced a Rs 2.5 cut in the prices of diesel and petrol per litre and asked state governments to go for a matching reduction.

The minister said the centre would reduce the tax rate by Rs 1.5 per litre while oil marketing companies would absorb another Re 1.

He appealed to the states to match the centre’s effort by reducing value-added tax or VAT by Rs. 2.50 so that the total benefit to citizens is at least Rs 5.

The reduction comes ahead of assembly elections in five states of Mizoram, Rajasthan, Madhya Pradesh, Chhattisgarh and Telangana.

Fuel prices had been on the boil for the last couple of months as petrol prices had gone up by 15 paise a litre and diesel by 20 paise on Thursday, pushing retail prices in Delhi to an all-time high of Rs 84 per litre and diesel to Rs 75.45.

Meanwhile, Assam Minister Himanta Biswa Sarma took to twitter to announce the fuel price cut.

In his tweet, Sarma said that, following the announcement of fuel price cut by rupees 2.50 per litre, Assam government has also decided to reduce rupees 2.50 on both petrol and diesel per litre, making the overall price rupees 5 less than the prevailing rate.