Soon after the finance minister's announcement, the Maharashtra government said it would give an additional relief of Rs 2.5 per litre on petrol - a total benefit of Rs 5 litre - Chief Minister Devendra Fadnavis said on Twitter.
The government Thursday announced a Rs 2.50 a litre cut in petrol and diesel prices, factoring in excise duty reduction of Rs 1.50 per litre and asking oil companies to absorb another 1 rupee per litre.
Finance Minister Arun Jaitley announced a cut of R s 2.50 percent in fuel prices. The Centre and oil companies will also take a hit of Rs 1.50 per litre and Re 1 per litre respectively in their revenue.
Delhi chief minister Arvind Kejriwal also echoed a similar view and said, "The Modi government had increased excise duty by Rs 10 per litre and today reduced it by Rs 2.50".
A one rupee per litre cut in excise duty results in over Rs 14,000 crore of revenue loss to the centre on an annualised basis.
The Modi government's policy of high oil taxes has become a source of political debate over the last month, with surging global oil prices no longer providing the Centre with a cushion to defend itself with.
Thirteen of the 21 Bharatiya Janata Party ruled states as well as Jammu and Kashmir, which is presently under governor's rule, have heeded Jaitley's call, while none of the opposition-ruled states have followed suit.
Petrol prices were Thursday hiked by 15 paise a litre and diesel by 20 paise, according to price notification of state-owned oil firms.
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Transport fuel prices have continued on a daily record-breaking upward movement with petrol inching closer to Rs 84 in Delhi and having already crossed the Rs 91 a litre mark in Mumbai.
"Last time it were only the NDA ruled states, which made the Value-Added Tax reductions after the Rs 2 excise cut by the Centre past year", he said.
Maharashtra charges the highest sales tax and VAT on petrol at 39.12 per cent.
"I am confident we'll be able to maintain the fiscal deficit even after absorbing this", the minister said.
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