Petrol prices were cut by Rs. 2.46 a litre on Thursday by three oil marketing companies. The second cut this month came into effect on Thursday midnight.

In Delhi, petrol will cost Rs. 67.78, against Rs. 70.24. the price will be Rs. 73.35 in Mumbai, Rs. 72.24 in Kolkata and Rs. 72.27 in Chennai. Hyderabad and Bangalore will see the maximum reduction of Rs. 3.22.

Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) announced the cut simultaneously. On May 23, they undertook the sharpest increase in the last decade, jacking the price up by Rs. 7.54 a litre. However, on June 3, they announced a reduction of Rs. 2.02.

An IOC statement said the reduction would vary from Rs. 2.46 to Rs. 3.22 a litre, depending upon the State taxes. In Delhi, the decrease would come to Rs. 2.46. In other States, it would depend on the rates of value-added and sales taxes.

The companies, which usually revise the rates on the 1ST and 16th of every month on the basis of the average import cost and forex rates of the previous fortnight, skipped changing the prices on June 16.

Gasoline rates have since fallen to $97 a barrel. But the rupee has depreciated to 57 against the dollar from 54.96 (the average of the first fortnight of June).

The statement said the IOC had accumulated Rs.1,053 crore in losses on petrol sales in the first two months because of its inability to revise the prices to reflect the high international oil prices and the depreciation of the rupee.

The IOC pointed out that the companies were suffering heavy looses: the current under-recovery on diesel had gone up from Rs. 6.13 to Rs.10.20 a litre; on kerosene from Rs.24.16 to Rs. 30.53; and on the domestic LPG from Rs. 331.13 to Rs.396.00 a cylinder. The under-recovery on the sale of sensitive products during 2012-13 was estimated at Rs. 83,000 crore.