Petrol prices were on Wednesday cut by 49 paise per litre and prices of diesel by Rs 1.21 a litre, after two consecutive hikes, on softening international oil rates.
The reduction in prices of the fuels will be effective from Wednesday midnight.
Prices of petrol in the national capital will be Rs 60 a litre from Thursday as against the current rate of Rs 60.49, while diesel will cost Rs 48.50 per litre as against Rs 49.71 currently, Indian Oil Corp (IOC), the country's largest oil company, said.
The reduction follows two rounds of price hikes in February and March - first by Rs 0.82 a litre in petrol and Rs 0.61 per litre in diesel on February 16 and by Rs 3.18 per litre in petrol and Rs 3.09 a litre in diesel on March 1.
Since the last price change, the international prices of both petrol and diesel have declined. The rupee-US Dollar exchange rate has, however, depreciated. "The impact of both these factors warrants decrease in retail selling prices of both petrol and diesel," IOC said in a statement.
Prior to these hikes, petrol price had been cut on ten occasions since August 2014 and diesel price six times since October 2014. Cumulatively, petrol prices had been cut by Rs 17.11 per litre in ten reductions since August and diesel by Rs 12.96 a litre since its deregulation in October, 2014.
This trend was reversed when rates were raised on February 16.
Fuel prices would have been lower but for four consecutive excise duty hikes since November totalling Rs 7.75 a litre on petrol and Rs 7.50 on diesel.
"The movement of prices in international oil market and rupee-USD exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes," the IOC statement said.