Petrol prices were reduced by 85 paise a litre on Monday by oil firms in the country as international prices allowed Indian firms to transfer the benefit to the customers.

The price cut of 85 paise is excluding local sales tax or value-added tax (VAT). Following the inclusion of taxes, the reduction will be by Rs 1.02 a litre in Delhi. The new cut in petrol price comes after the prices were cut by Rs 2 a litre on March 16, recording its largest cut since a reduction of Rs 2.40 a litre in rates.   

Indian Oil Corp (IOC), the nation's largest fuel retailer, said that the international prices of petrol have declined from $122.74 per barrel to $119.23 a barrel since the previous rate cut, the oil companies have decided to reduce the price and forward the benefit to the customers in the country. The oil firms also benefitted from rupee- dollar exchange rate as it declined from Rs 54.40 to a dollar to Rs 54.28.    

Oil firms in the country currently determinate petrol price on the 1st and 16th of every month on the basis of average imported oil price.