Uttar Pradesh will take a Rs 20,000 crore-hit in VAT collection to facilitate a Rs 2.50 reduction in per litre rates of petrol and diesel.

The price of diesel rose for the 11th day in a row on Tuesday, wiping out the entire Rs 2.50 per litre cut in rates announced by the Centre government on October 4.

The Centre had cut excise duty cut on fuel by Rs 1.50 per lite and had asked oil marketing companies (OMSs) to subsidise petrol and diesel prices by Re 1 a litre.

While Jet Airways rose over 2% higher to 198 level, SpiceJet rose 3.38% to 70.40 on the BSE. IndiGo airline operator Interglobe Aviation was trading 4.14% or 30 points higher to 776.65 level.

Petrol and diesel prices were cut by a minimum Rs 2.50 on October 5. But petrol is still above Rs 82 mark in Delhi and has crossed Rs 85 in Mumbai.

Delhi still has the lowest prices for petrol and diesel among all four metro cities despite the Kejriwal government not cutting VAT. Mumbai, on the other hand, continues to be the costliest.

On Thursday, union Finance Minister announced the decision to cut excise duty on both petrol and diesel by Rs 1.5 a litre and further asked oil marketing companies to reduce the price by Rs 1.

Four days after the fuel price cut announcement, petrol has seen total 53 paise rise, while diesel has been up by 87 paise.

Within a day of the one-off excise duty cut and PSUs subsidising fuel, petrol and diesel prices are on the rise again and have hit a three week high.