State-run oil companies on Friday announced a cut in petrol prices by Rs 2 per litre from Saturday, while diesel rates were kept steady.
The cut, the steepest reduction in nine months, comes amid a slide in international crude prices.
Following the reduction, the price of petrol in Delhi will be Rs 68.34 per litre as against Rs 70.74 currently.
Diesel prices were kept steady amid expectations that the rates would be raised by Rs 40-50 paise per litre.
The cut in petrol price follows two rounds of hike in rates since February worth Rs 1.50 and Rs 1.40.
International prices of crude oil have slid from $112.73 per barrel to $107.41, Indian Oil Corporation said in a statement.
"Following this trend, it has been decided to pass on the benefit to the customers," the company said.
While it had lost Rs 500 crore from the sale of petrol so far during the current financial year, oil firms had lost a total of Rs 1,130 crore, Indian Oil said.
Earlier reports said petrol price may be slashed by around Re. 1 per litre while diesel price may be increased by 40-50 paise a litre later this month.