Cash-strapped Punjab government on Sunday increased petrol price by 92 paisa per litre and diesel price by 88 paisa.
This is the second time this year that the prices have been increased.
The cost of one litre of petrol in the state will now be Rs 98.65 while diesel prices will be Rs 88.95 per litre.
With the hike in price, the state aims to generate Rs 600 crore per annum as revenue, said officials.
They said despite the increase in prices, diesel in Punjab would be cheaper than neighbouring Haryana, and both diesel and petrol cheaper than Rajasthan.
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