The Madhya Pradesh government also withdrew the additional cess of Rs 1.50 per litre on diesel.
The dealers are protesting marketing guidelines amended by public sector oil marketing companies (OMCs).
Maharashtra Cabinet has slashed taxes on oil to cut petrol and diesel prices by Rs two and Rs one respectively.
Gujarat government today announced 4 per cent cut in the VAT on petrol and diesel.
Truck owners and operators today began their 36-hour nationwide strike against the disruptive policies under the GST and seeking inclusion of diesel in the new tax regime.
Dharmendra Pradhan on October 4 had appealed to the states to cut VAT on petrol and diesel by 5 per cent.
UPF has announced nationwide strike of dealers on October 13 to press for various demands including better margins and inclusion in GST.
Earlier this week, the Centre had cut basic excise duty on petrol and diesel by Rs 2 a litre. Oil Minister Dharmendra Pradhan had on Wednesday asked the states to slash the VAT on petrol and diesel in direction of the consumer interest.
In New Delhi, Oil Minister Dharmendra Pradhan said states should cut sales tax or VAT on petrol and diesel by 5 per cent. Jaitley, he said, will soon write to all states on the issue.
The government on Tuesday reduced Basic Excise Duty rate on both branded and unbranded petrol and diesel by Rs 2 per litre.
Dharmendra Pradhan attributed the recent hikes in fuel prices to the market fluctuations caused by the hurricanes Irma and Harvey in the US that caused market fluctuations.
The Congress on Saturday termed the Narendra Modi-led central government a 'fuel-loot sarkar' and demanded withdrawal of the excise duties on petrol and diesel.
Ajay Maken said that considering the fall in crude oil prices in the international market, the prices of petrol and diesel should be Rs 34 and Rs 32, respectively.
After startups offering services ranging from errand boys to household maids comes this new idea of doorstep delivery of fuel
Prior to that, petrol price was hiked by Rs 1.39 per litre and diesel by Rs 1.04 a litre from April 16.
NITI Aayog also suggested that government should consider more tax incentives to promote EVs so that they can be made available to people at reduced cost.
Petrol price was today hiked by a marginal 1 paisa per litre and diesel by 44 paisa a litre, the second increase in rates this month.
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