The Manohar Parrikar government in Goa today almost withdrew the 22 per cent value added tax (VAT) on petrol in the state, pegging it at a nominal 0.1 per cent, thereby reducing the retail selling price of the fuel to around 54.96 per litre - the cheapest in the country.
The slashing of prices comes at a time when state-run oil marketing firms are reported to be looking for an upward revision in petrol prices.
The plummeting prices caused a run on petrol pumps in the state, which went dry by the afternoon, forcing oil marketing companies to send additional tankers to retail stations.
Fresh supplies are expected to normalise availability of petrol by the evening, venders said.
With petrol prices plummeting from Rs65 litre as on Sunday to Rs54.96 on Monday, big queues were seen at almost all petrol pumps and vendors at the petrol stations said majority of the people were topping up full tanks, which drained the stocks within hours of the opening of the station.
Cars and two-wheelers were queuing up on the roads to get into the petrol station, choking off the roads and causing traffic problems.