Petrol, diesel prices cut amid confusion: All that happened today

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Petrol prices were slashed by 59 paise in Mumbai and 60 paise in Delhi today.

The marginal decline in the fuel prices had its share of excitement with state-owned Indian Oil Corp (IOC) first announcing a reduction of 60 paise - the biggest since daily price revision was introduced in mid-June previous year, only to retract it within a couple of hours citing a technical error.

Diesel rates were cut by 56 paise in Delhi to ₹68.75 per litre.

State sales tax or VAT vary from state to state. This was rectified to 1 paisa a litre. Diesel rates were reduced by a similar proportion to ₹73.20.

The main reason for the futures is to hedge against rising prices of petrol and diesel.

Delhi has the cheapest price among all metros and most state capitals.

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In all, petrol price was increased by ₹3.8 per litre and diesel by ₹3.38 in that fortnight.

The price effective today is based on average global rate from May 15 to May 29. Economic Affairs Secretary Subhash Chandra Garg had on Monday stated that fuel prices are expected to cool in the next two or three days.

"The state exchequer would lose Rs 509 crore per annum by reducing the tax share by Re 1 per litre".

Kerala will cut taxes on gasoline and gasoil to reduce retail fuel prices by 1 rupee/litre from June 1, Finance Minister Thomas Issac told television channel CNBC 18.

The cut comes after 16 consecutive day of price increase since May 14 when fuel retailers ended the pre-Karnataka poll hiatus.

The decision was taken during a Cabinet meeting, however the rate of tax cut has not yet been finalised.