Amravati: After poll-bound Rajasthan, the Andhra Pradesh government Monday announced a Rs 2 cut in VAT on petrol and diesel to check the mounting prices of these fuels.

Chief Minister N Chandrababu Naidu announced the reduction in Value Added Tax in the state assembly. He said the state government was currently levying Rs 4 per litre VAT on petrol and diesel.

"The central government has been imposing a heavy burden on people by steeply increasing the prices of petrol and diesel despite heavy income in the form of various levies and dividends.

"Though the state is faced with a deficit budget, we have decided to reduce the tax and ease the burden on people," he said.

The state would have to forego a revenue of Rs 1,120 crore due to the measure, he said.

A day before the opposition-sponsored Bharat Bandh against rising fuel prices, poll-bound Rajasthan had on Sunday slashed the VAT on petrol and diesel.

Chief Minister Vasundhara Raje announced a 4 percent reduction which brought the prices of the two commodities down by Rs 2.5 per litre.