Petrol will cost Rs. 70.24 per litre from current Rs. 71.16 per litre and diesel will cost Rs. 41.28 per litre as against the current rate of Rs. 40.91.
"We have issued a notification slashing the VAT on the hiked component of petrol while the relief of 37 paise being provided since September last year will be withdrawn on diesel. The new rates will come into effect from midnight tomorrow," a senior Delhi government official said.
Delhi government had a fortnight ago decided to slash the VAT on the hiked component of the petrol price.
The city government had withdrawn 12.5 per cent VAT on the increased component of diesel when oil companies had hiked diesel price by Rs. 3.37 in June last year.
The government had arrived at the figure of 37 paise for cut in diesel price by removing the 12.5 per cent VAT component on the hike of Rs. 3.37.
Chief Minister Sheila Dikshit, while presenting the Budget in the Delhi Assembly on May 28, had announced withdrawing the 20 per cent VAT on increased component of petrol to provide some relief to people battered by high inflation.
The relief on account of withdrawal of VAT on hiked component of Rs. 6.28 was calculated at Rs. 1.26 but as oil companies slashed prices by Rs. 1.68 on June 2, the reduction in VAT on per litre of petrol was revised at 92 paisa per litre.
The Delhi Budget in which Dikshit had made the proposal to forego the VAT on hiked component was passed by the Assembly on June 4 but officials said there was a delay in issuing the notification due to procedural reasons.