Petrol price was on Monday cut by 56 paise per litre on the back of appreciation in rupee value against the US dollar.

Petrol will cost Rs 67.90 per litre at Indian Oil Corp’s petrol pumps in Delhi with effect from midnight tonight as against Rs 68.46 a litre presently, the company announced today.

Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL), the other two state fuel retailers, are expected to follow suit in cutting rates but price at their pumps would vary by one or two paise.

“It has been decided to revise the petrol prices downward by Rs 0.56 per litre (excluding state levies in Delhi) with effect from October 9,” IOC said in a press statement New Delhi.

Petrol in Mumbai will be cut by 71 paise to Rs 74.43 and by 70 paise in Kolkata to Rs 75.44 a litre.

In Chennai, it will cost Rs 71.48 per litre as against Rs 72.19 presently.

The government had in June 2010 deregulated petrol pricing, giving oil companies freedom to fix rates in line with cost.

Petrol price were last revised on June 24 when they were hiked by 70 paise.

“Presently, the rupee-dollar exchange rate has shown an appreciating trend. The international oil prices, however, continue to remain firm casting their shadow on petrol prices,” IOC said, adding there had been significant volatility in international oil prices and exchange rate.

IOC said the trends in the international oil market and exchange rate would be closely monitored and would be reflected in future price changes.

Despite the pricing freedom, petrol prices have not moved in tandem with cost. IOC, BPCL and HPCL lost Rs 2,600 crore on sale of petrol during April-September “due to inability to change retail selling prices to the desired extent in line with market conditions,” it said.

Since it being a deregulated commodity, losses on petrol are to be absorbed by the oil companies.

Other than petrol, the fuel retailers also lose heavily on sale of regulated products diesel, cooking gas (LPG) and kerosene.

They currently lose Rs 11.65 per liter on diesel, Rs 33.93 on kerosene sold through PDS and Rs 468.50 per 14.2-kg domestic cooking gas cylinder.

At this rate, the three firms are projected to lose Rs 160,000 crore in revenue on sale of the three products during the current fiscal, IOC added.