The Odisha government on Tuesday increased by 3 percent the Value Added Tax (VAT) on petrol and diesel inviting strong criticism from the opposition parties and the common people.

With this hike, the price of petrol has gone up by Rs.1.39 to Rs.59.96 per litre, while the price of diesel has been increased by Rs.1.14 to Rs.49.8 per litre.

The state government increased the tax from existing 23 percent to 26 percent to mop up more revenue, said Finance Minister Pradip Kumar Amat.

“By increasing the VAT by 3 percent on petrol and diesel, the state government will get additional revenue of Rs.361 crore per year. It would get Rs.90 crore additional revenue in the next three months during the current fiscal,” said Amat.

He said the central government is hiking tax on the petroleum products to generate more revenue when the price of the product is decreasing in the international market.

“We have hiked the price of petrol and diesel to keep a balance in revenue collection,” said Amat.