The Maharashtra government has decided to reduce sales tax to bring relief to people adversely affected by the steep hike in the prices of petrol and diesel.
While the state is still debating the quantum, indications are there will be a minimum 4 per cent cut on the sales tax.

Chief minister Vilasrao Deshmukh held a meeting with finance minister Jayant Patil on Wednesday  evening after the Centre announce the fuel price hike.

At present the sales tax in Mumbai, Navi Mumbai and Thane is 30% on petrol and 34%on diesel. The sales tax component for rest of Maharashtra is 31% for diesel and 29% for petrol. There is also an addition surcharge of Re 1 per litre.

Meanwhile in Mumbai, vehicle owners began flocking to petrol pumps by Wednesday afternoon after learning about the fuel price hike. Though queues werent very long, dealers said most customers, including bikers who normally buy just Rs100 or Rs50 worth of petrol, filled up their tanks.

Sandeep Bhanushali, who runs a Bharat Petroleum outlet at Worli Naka, said, There is a palpable rush today. People want to buy more."

By late evening, the queues had become longer and quite a few pumps in the city had run out of petrol and diesel.

Big transporters, however, said they had braced for the hike. Chittaranjan Dass, vice-president, All-India Confederation of Goods Vehicle Owners' Associations, ruled out any protest. In the past 10 years, he said, our experience has been that whenever diesel prices were raised and we launched an agitation, the increase was not reversed. Only truck owners suffered.

S Sriraman, professor of transport economics at Mumbai University, said it would have been better had the government staggered the hike over a period of time.