Petrol price cut by 70 paise a litre; effective Tuesday midnight

New Delhi: The price of petrol was on Tuesday cut by 70 paise a litre, excluding local levies, the second reduction in rates this month as appreciation of the rupee against the US dollar made oil imports cheaper.

The reduction, effective midnight tonight, excludes local sales tax or VAT and the actual cut will be higher, varying from city to city.

The price of petrol in Delhi will be lowered by 85 paise to Rs 71.41 a litre. This follows a 75 paise a litre reduction on April 1, which translated into a cut of 90 paise in Delhi to Rs 72.26.

In Mumbai, petrol will cost Rs 80 a litre from on Wednesday as against Rs 80.89 currently.

Announcing the rate cut, Indian Oil Corp, the nation's largest fuel retailer, said, "The continued appreciation of the rupee has resulted in reduction in petrol prices."

There will be no change in diesel prices as oil firms revise rates of the nation's most consumed fuel on a monthly basis.

The government freed petrol prices from its control in June 2010 and since then state-owned oil firms have been revising rates on the 1st and 16th of every month based on the fortnightly average of international oil prices and the rupee-US dollar exchange rate.

For diesel, the government had in January last year decided to allow oil firms to raise rates by up to 50 paise a litre, excluding local levies, every month until losses on the fuel are wiped out.

Since January 2013, diesel rates have risen by Rs 8.33 over 14 monthly installments. IOC said it still loses Rs 5.49 on the sale of every litre of diesel.