The Maharashtra cabinet on Tuesday decided to cut the prices of petrol and diesel by Rs 2 and Re 1 respectively. The new rates will be effective from midnight.
The reduction in tax comes just before Diwali.
The Maharashtra government reduced VAT on petrol and diesel which resulted in cut in the prices.
Earlier in the day, Gujarat government had decided to reduce the value added tax (VAT) on petrol and diesel by 4 per cent.
With this rate cut, the price of petrol will come down by Rs 2.93 and that of diesel by Rs 2.72 in the state, Chief Minister Vijay Rupani said.
The lowering of tax follows Union Finance Minister Arun Jaitley recently writing to all state governments nudging them to reduce taxes on petrol and diesel.
The Centre had recently brought down excise duty on petrol and diesel by Rs 2 per litre.
With PTI inputs