This is the second cut in petrol prices in a month. The price was lowered by Rs.3.05 a litre Oct 1 on account of softening of prices in international markets as well as strengthening of the rupee.
Allowing for local taxes, the prices per litre of diesel will be Rs.53.10 in Delhi, Rs.57.49 in Kolkata, Rs.60.08 in Mumbai and Rs.56.61 in Chennai.
The corresponding rates for petrol will be Rs.71.02 in Delhi, Rs.78.07 in Kolkata, Rs.78.04 in Mumbai and Rs.74.22 in Chennai.
While the petrol price is market-linked and revised periodically depending on crude oil price in the international markets, diesel is subsidised and the government has allowed the marketing firms to hike it by a "small amount" every month.
"Even after the current increase, under-recovery on retail diesel stands at Rs.9.58 per litre," IOC, the country's largest oil marketing firm, said in a statement.
"The movement of prices in international oil market and INR-USD exchange rate is being closely monitored and developing trends of the market will be reflected in future price changes," it said.
A government panel headed by former Planning Commission member Kirit S. Parikh Wednesday suggested an immediate increase of Rs.5 a litre in diesel prices.
However, the government is unlikely to implement the expert panel's recommendation due to political compulsions as as assembly and parliamentary elections are round the corner.
