Petrol Price Cut by 91 Paise Per Litre, Diesel by 84 Paise

New Delhi: Petrol price was on Sunday slashed by 91 paise per litre - its seventh reduction since August, while that of diesel was reduced by 84 paise, its third straight cut, as international oil rates continued to slump.

The revised prices will be effective from the midnight of November 30 and December 1, Indian Oil Corp announced here.

In Delhi, petrol will cost Rs 63.33 a litre as compared to Rs 64.24 per litre previously and in Mumbai, it will cost Rs 70.95 per litre - a reduction of 96 paise.

Diesel will cost Rs 52.51 a litre in Delhi from Monday as against Rs 53.35 until now while in Mumbai, the price will be cut by 93 paise to Rs 60.11.

Rates differ from state to state due to differential local sales tax or VAT.

This is the seventh consecutive reduction in petrol prices since August and third in diesel rates since October. Prior to Sunday's reduction, petrol price has been lowered by a cumulative Rs 9.36 per litre since August.

The prices of petrol and diesel were last revised downwards by Rs 2.41 a litre and Rs 2.25 a litre, respectively, on November 1 (including state levies at Delhi) on the back of declining international oil prices.

Diesel price was cut for the first time in more than five years on October 19 by Rs 3.37 a litre when the government decided to deregulate the fuel.

(Read: How diesel price deregulation impacts you)

"Since the last price changes, the international prices of both petrol and diesel have continued to be on a downtrend. The rupee-dollar exchange rate has however appreciated since the last price change. The combined impact of both these factors warrant a decrease in retail selling prices of both petrol and diesel," IOC, the country's largest fuel retailer, said in a statement.

"The movement of prices in international oil market and rupee-dollar exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes," the statement said.

Rates would have been cut by Rs 1.50 on November 16 but the government took away the gains by way of an excise duty increase.

Excise duty on normal or unbranded petrol was hiked from Rs 1.20 per litre to Rs 2.70 per litre and unbranded diesel from Rs 1.46 a litre to Rs 2.96. The same on branded petrol was raised from Rs 2.35 a litre to Rs 3.85 and on branded diesel from Rs 3.75 to Rs 5.25 per litre.

While the fall in global rates and the resultant cuts in retail prices have led to loss of revenue to the exchequer, particularly state governments, there was not any loss to the central government on account of reduction in petrol and diesel prices as excise duty on the two fuel is fixed and not ad valorem.

The increase in excise duty would result in an additional revenue of Rs 13,000 crore for the government.

State-owned fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) follow the fortnightly review practice and change rates on 1st and 16th of every month.

Oil firms revise rates of petrol, which was deregulated in June 2010, and diesel on the 1st and 16th of every month based on average international oil price and rupee-dollar exchange rate.

Falling for the fifth straight week, the rupee, which plays an important role in determining the prices of the imported fuels, ended lower at 62.02 against dollar on Friday. (Read more)