Panaji, Sep 2 (IANS): The Goa government has hiked VAT on petrol by two per cent taking the price of the fuel to Rs 63.43 per litre, a spokesperson said on Saturday.

The Value Added Tax (VAT) on petrol has been hiked from the existing 15 per cent to 17 per cent.

"Even after such increase, petrol would still be cheaper by around Rs 14 as compared to Maharashtra and by around Rs 7 as compared to Karnataka (both neighbouring states)," the statement said.

The spokesperson said the hike in VAT has been effected in order to rationalise the price difference between petrol and diesel in Goa.

"Goa was having one of least differences in price per litre of petrol and diesel owing to the lower VAT rate on petrol, which is only around Rs 4.70 in Goa. In order to rationalise this to some extent without putting a substantial burden on the consumers, the government has decided to increase the VAT rate on petrol by two per cent," he added.