The SAD-BJP led government in Punjab has raised the ceiling of value added tax (VAT) it can levy on petrol by two per cent to 32% even as the two parties are fiercely protesting against inflation in the Parliament, reports agency source.

The decision to raise the cap on petrol VAT was taken at a meeting of the state cabinet presided over by Chief Minister Parkash Singh Badal here yesterday.

The SAD-BJP government has raised the cap by 2%, even as the two parties have been protesting in the Parliament against the Centre`s move, to raise fuel prices and high inflation that has been in the double digits for the past few months.

The present rate of VAT on petrol is 27.5%, with the upper cap being at 30%, which has now been hiked by 2%.