Chandigarh/Chennai: After West Bengal, Haryana on Sunday stepped in to reduce the impact of the latest hike in prices of cooking gas and diesel on the common man by announcing a waiver of the 5 per cent VAT on kerosene.

At the same time, there was also no let up in protests against the fuel hike with key UPA leader and DMK supremo M Karunanidhi criticising the decision saying it would badly hit the middle class and the poor.

The move by Haryana came even as Finance Minister Pranab Mukherjee planned to write soon to Chief Ministers to reduce state levies on at least LPG to reduce the impact of the price hike on the common man.

Announcing Haryana's decision, Chief Minister Bhupinder Singh Hooda said with the value added tax (VAT) being waived for kerosene the fuel will be 70 paisa cheaper in the Congress-ruled state and will now cost Rs 14 per litre.

Hooda hinted that the state government would also take more steps to control price rise in the state. The VAT on LPG having already been waived in 2008, the waiver on kerosene today makes Haryana a VAT-free state for these two key items.

He said the state government had decided to waive off VAT in keeping with the directions of the Congress president Sonia Gandhi to minimise the burden on the masses following another round of fuel hike on Friday.

Karunanidhi wanted the AIADMK government in Tamil Nadu to emulate the example of Trinamool Congress-headed government in West Bengal. Chief Minister Mamata Banerjee on Saturday decided to withdraw sales tax on cooking gas to partially neutralise the impact of the price hike. The decision would reduce the price of a cylinder of LPG by Rs 16.

In Kerala, Chief Minister Oommen Chandy said Government will take steps to reduce hardships to the public.

Asked by reporters if Kerala would also waive the cess on LPG as done by West Bengal, he said, "we will do whatever we can. There is no need for any apprehensions."

The situation in Kerala was different from that of West Bengal, he said. The Centre on Friday increased diesel price by Rs three per litre, domestic LPG by Rs 50 per cylinder and kerosene by Rs two per litre.

"Whenever this issue arises, the Centre tries to justify the fuel price hike," DMK president M Karunanidhi said in Chennai in his first reaction to the increase in the hike.

The Centre should not rest by merely defending the hike "on some excuse" every time the issue arose, but treat it as its utmost duty to completely solve it as the hike affects public, especially middle class and people living below poverty line, he said in a statement.

Karunanidhi also asked the Tamil Nadu Government to reduce sales tax on fuel prices emulating West Bengal government and also as done by his government in the past.

LJP president Ram Vilas Paswan opposed the hike and demanded a rollback in the interest of the public.