The Mizoram government will hike diesel and petrol prices by 2.5 per cent and 5 per cent, respectively, from June 1 to fight the economic slowdown caused by the outbreak of novel coronavirus, Taxation Minister Lalchamliana said on Saturday.

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Lalchamliana said the meeting of council of ministers chaired by Chief Minister Zoramthanga also decided to increase the value added tax (VAT) of diesel from 12 per cent to 14.5 and that of petrol from 20 per cent to 25 per cent.

"Diesel price would increase from Rs 60.49 to Rs 62 per litre and petrol from Rs 66.54 to Rs 69.87, which will come into effect from June 1," he said.

The minister said the state Goods and Services Tax collection has considerably reduced from Rs 48 crore in March to Rs 14 crore in April in the wake of the pandemic.

"Mizoram will face a massive financial crisis unless drastic economic measures are taken," he added.