Petro prices were today increased in the national capital by a steep Rs 2.78 per litre and diesel by Rs 1.83 as the Aam Aadmi Party government raised Value Added Tax (VAT) on them.

The VAT on petrol has been increased to 25 per cent from 20 per cent while it will be 16.6 per cent for diesel against current rate of 12.5 per cent. The hike will came into effect from midnight tonight.

After the increase, a litre of petrol will cost Rs 69.43 per litre while that of diesel will be Rs 52.07.

"The VAT rate on petrol has been increased from 20 per cent to 25 per cent and on diesel from 12.5 per cent to 16.6 per cent. The increase in the price of petrol will be Rs 2.78 per litre and it will be Rs 1.83 per litre for diesel," the government said in a statement.

It is the first hike in VAT by the AAP government since capturing power in Delhi.

Justifying the increase, the government said it effected the hike to bring uniformity in the tax rates with neighbouring states.

A meeting of finance ministers of Delhi, Punjab, Haryana and Himachal Pradesh on May 21 had decided to move towards uniformity in tax rates and develop a common market to boost trade in the region.

"On the basis of the decision taken in the meeting of Finance Ministers of Northern States on May 21 for bringing uniformity in the tax rates, Delhi government has decided to increase VAT rate on diesel and petrol," the government said in a statement.

A senior government official said that after this increase in the rate of VAT, the retail price of diesel in Punjab, Haryana and Delhi will be almost the same.

The Delhi Assembly had on June 30 cleared a VAT Amendment Bill which allowed it to increase VAT up to 30 per cent on 11 goods including petroleum products, tobacco and aerated drinks.