CHENNAI: The Tamil Nadu government on Sunday announced the reduction of sales tax on diesel by 45 paise.

Chief Minister M Karunanidhi, in a statement, said the incremental component of sales tax on diesel would be reduced by 45 paise, which is expected to cost the exchequer Rs 180 crore.

However, there would be no hike in bus fares, he said.

This decision would cost the exchequer another Rs 100 crore.

The Centre hiked diesel prices on June 5 by Rs 2.23, from Rs 33.72 to Rs 35.95.