Petrol and diesel prices Thursday were reduced for the first time in over two months because of a drop in the cost of production, according to state-owned oil firms.
Petrol price was cut by 21 paise per litre and diesel by 11 paise, a price notification issued by state retailers said.
This is the first price cut arising from a drop in international oil prices.
The rates were reduced by a minimum Rs 2.50 per litre across the country on October 5, when the government cut excise duty on petrol and diesel by Rs 1.50 a litre and asked oil PSUs to subsidise the fuels by another Re 1 a litre. The reduction in BJP-ruled states was more as they matched this cut by an equivalent reduction in local sales tax or VAT.
The price cut follows international oil prices trading near the lowest level in a month on a bigger-than-expected gain in American stockpiles. West Texas Intermediate for November delivery traded 11 cents lower at USD 69.64 a barrel on the New York Mercantile Exchange, while Brent for December settlement was at USD 79.89 a barrel on the London-based ICE Futures Europe exchange. Brent had earlier this month hit a four-year high of USD 86.74 a barrel.
Prior to Thursday's cut in rates, diesel price had risen by Rs 2.74 per litre since October 5 to more than wipe away the excise duty cut and oil firm subsidy. Petrol price had during this period risen by Rs 1.33 a litre.