Patna, Nov 4 (IANS): Taking cue from the Centre, the Bihar government on Thursday, on the day of Diwali, also reduced Value Added Tax (VAT) by Rs 3.90 per litre on petrol and Rs 3.20 per litre on diesel.

Chief minister Nitish Kumar announced the reduction of VAT in fuel prices through his official Twitter handle after the Centre reduced excise duty by Rs 5 on petrol and by Rs 10 on diesel.

With this, the rate of petrol in Bihar dipped by Rs 8.20 per liter while diesel price fell by Rs 15.10 per liter.

Petrol and diesel are considered one of the main sources of income for the Bihar government. It had levied 26 per cent VAT on petrol and 19 per cent on diesel per liter. Through this, the Nitish Kumar government was earning Rs 23 per liter on petrol and Rs 16 per litre on diesel.

The state government was under pressure ever since Centre reduced excise duty followed by 9 BJP ruled states.

Sources have said that the Narendra Modi government has taken the decision keeping in view the upcoming Uttar Pradesh assembly elections.

Meanwhile, RJD chief Lalu Prasad sharply reacted to the decision of the Modi government. He said that the Centre should have reduced petrol price by Rs 50 not by Rs 5.