The cut in petrol price comes after two rounds of hikes since February.
As per Petroleum Ministry data, the Singapore benchmark FOB (freight on board) price of petrol fell to $120.43 a barrel on March 13 from $123.54 a barrel on March 1.
After the revision, the fuel will cost Rs 68.34 per litre in Delhi, Rs 75.14 per litre in Mumbai, Rs 71.41 per litre in Chennai, Rs 75.84 per litre in Kolkata, Rs 74.59 per litre in Hyderabad and Rs 75.26 per litre in Bangalore, according to an Indian Oil press release.
In the National Capital Region, the rates are as follows: Faridabad - Rs 69.60 per litre, Gurgaon - Rs 69.40, Noida - Rs 73.69 and Ghaziabad - Rs 73.58.
The oil firms also took into account the rupee-dollar parity before deciding on the price cut for petrol. The Indian currency has gained marginally at Rs.54.44 on March 14 from Rs.54.48 on March 1 against the US dollar, according to data from the Reserve Bank of India.
Oil marketing companies have lost Rs 1,130 crore on sale of petrol so far during the current financial year, the release said.
In addition to losses on the sale of petrol, oil retailers are suffering an under-recovery of Rs. 8.64 on sale of diesel, Rs.33.43/litre on the sale of kerosene and Rs 439 per cylinder on the sale of liquefied petroleum gas. Total under-recoveries for the three companies - Indian Oil, Bharat Petroleum and Hindustan Petroleum - is expected to be around Rs.1,63,000 crore during current year.
Unlike petrol, prices of diesel, LPG and kerosene are not decontrolled, and the government has the ultimate control on pricing. The government subsidises the three products and compensates the oil firms for selling the fuels at lower prices.
India is largely dependent on imports for its fuel needs. It imports 80 per cent of the crude it refines, about 3.7 million barrels per day.
The government is working towards making the country self-sufficient for its petroleum needs by 2030, Petroleum Minister M. Veerappa Moily said on Thursday.