Responding to the direction of Congress President Sonia Gandhi, the party government in Haryana today reduced VAT on diesel and abolished it on domestic LPG even as Chief Minister Bhupinder Singh Hooda ruled out any relief on petrol.

A special meeting of the state Cabinet here today reduced VAT on diesel from 12 per cent to 8.8 per cent and abolished VAT on domestic LPG. There would be no relief to the consumers using petrol, Hooda told reporters at a press conference later. The changes in VAT would result in a reduction in the price of diesel and petrol by approximately Re one and Rs 13 respectively following the steep hike of Rs three and Rs 50 announced by the Congress led UPA government at the Centre two days back.

Hooda said the Cabinet took the decision following the directions of Gandhi that the burden on the people should be reduced by the states by taking some steps. The state would lose a total of Rs 357 crore, - Rs 312 crore and Rs 45 crore from the sale of diesel and domestic LPG during the current year, he added. Ruling out any relief in petrol prices, the Chief Minister said that the product was already cheapest when compared with its prices in neighbouring states, including Chandigarh, Haryana and Delhi.

He told a questioner that the cabinet did not discuss the issue of hiking fares of buses in the wake of increase in diesel prices. Asked about the appeal for austerity made by the Prime Minister Manmohan Singh, Hooda said that the state was already exercising restraint on wasteful expenditure.