The reduction was lower than the anticipated cut of Re 1 per litre because of drop in rupee and firming of international prices during the past 48 hours.
With global crude rates coming down, petrol price has been cut by Rs0.78 per litre, the second reduction in two weeks.
The reduction, which will be effective from midnight tonight, was lower than the anticipated cut of Re 1 per litre because of drop in rupee and firming of international prices during the past 48 hours.
Petrol in Delhi will cost Rs 65.64 per litre as against Rs66.42 a litre at present.
The reduction comes on back of a 3.2 per cent or Rs2.22 per litre cut in rates effected from November 16. This was the first cut in retail prices in nearly three years and the first since prices were decontrolled in June 2010.
Before that, oil companies on November 4 raised petrol price by Rs1.80 a litre as fall in rupee's value against the dollar increased the cost of oil imports.
Indian Oil Corp (IOC), the market leader which announced latest cut in price on behalf of the industry, said the reduction was made possible as the decline in international rates of the fuel outweighed the drop in the rupee.
"The combined impact of the two factors is an over-recovery of Rs0.65 per litre (excluding taxes)," it said in a statement.
The price of petrol averaged about USD 109 in the second fortnight of November, over 5 per cent less than the $114.14 a barrel in the previous 15 days.
Rupee averaged 51.50 per dollar this fortnight, 4.4 per cent weaker than the 49.32 in the preceding two weeks. A lower rupee increases the cost of oil imports for Indian refiners.
Petrol in Mumbai will cost Rs 70.65 a litre, down by Rs0.82 per litre.
IOC, Bharat Petroleum Corp and Hindustan Petroleum Corp review petrol prices every two weeks based on the average of global benchmarks in the previous fortnight.
While petrol price was freed from government control in June last year, the government caps prices of other fuels -- diesel, cooking gas and kerosene to rein in inflation.
IOC said under-recovery or revenue loss on diesel has gone up from Rs10.17 per litre to Rs12.03 a litre as international benchmark of the fuel has firmed up. Similarly, loss on kerosene has increased from Rs25.66 per lire to Rs28.56 a litre and that on domestic LPG from Rs260.50 per cylinder to Rs286.50 per cylinder.
"The increase in under-recovery on sensitive productions would increase the per day under-recovery of oil marketing companies from Rs348 crore per day during second fortnight of November to Rs452 crore per day with effect from December 1," it said adding for the full fiscal the revenue loss is now estimated at Rs135,000 crore.
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