Petrol will cost Rs 1.26 less in the capital with Delhi government slashing 20 per cent VAT on the hiked component in its budget on Monday which also provided a huge push to social sector spending to apparently win over sections disgruntled with Congress as it prepares for next year's Assembly polls.

However, the slash in petrol prices may not give the much needed relief to common man as Delhi government proposed a fresh five per cent VAT on CNG, which is used by a number of people in the city for running their vehicles.

Petrol will now cost Rs 71.92 after the cut. After the increase last week, Delhiites used to pay Rs 73.18.

The CNG price will see an increase from Rs 35.45 per kg following the five percent hike in VAT.

"The price of petrol in Delhi is the lowest among all the metro cities and lower compared to the price in neighbouring cities of Haryana, Uttar Pradesh also. I have deeply considered the matter and of the view that the citizens of Delhi need to be provided some relief.

"Honourable members will recall earlier too we have given relief to the people when there was an increase in the price of diesel by exempting vat on the increased component.

Similarly, I propose to exempt the recently announced increase in the price of petrol from the levy of 20 per cent of VAT," Chief Minister Sheila Dikshit said presenting the budget for 2012-13.

Social sector has the highest allocation in the Rs 33,436 crore budget, the second since Dikshit has been handling the finance portfolio. Tax collection pegged at Rs 26,150 crore.

The plan allocation plan allocation is Rs 15,000 crore and the non-plan allocation pegged at Rs 18,268 crore.

The budget has a heavy dose of populist measures and is seen as a bid to regain the Congress' support base for the assembly elections in the wake of the party's crushing defeat in the municipal polls.