New Delhi, Aug 31 (PTI): Petrol price was today hiked by a steep Rs 2.35 per litre, the sixth increase in rates in three months, and diesel by 50 paise per litre on falling rupee and firming international oil prices.

The increase in rates, which will be effective midnight tonight, are excluding local sales tax or VAT, Indian Oil Corp, the nation's largest fuel retailer, announced. The actual hike will be higher and will vary from city to city.

Petrol price in Delhi will go up by Rs 2.83 to Rs 74.10 per litre while it will cost Rs 81.57 per litre in Mumbai as against Rs 78.61 currently.

This is the sixth increase in rates since June and in all petrol prices have gone up by a massive Rs 9.17 per litre, excluding VAT. Price of petrol in Delhi has gone up by over Rs 11 per litre after including state tax since June 1.

In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses.

Diesel price in Delhi has been hiked by 57 paise to Rs 51.97 per litre while it will cost Rs 58.86 in Mumbai from tomorrow as compared to Rs 58.23 currently.

Today's hike in the eighth since the January 17 and most of the losses on diesel sales should have been wiped off by now to make the fuel market priced. But the fall in rupee, around 25 per cent since April, has worsened the situation and oil firms are losing Rs 12.12 per litre despite prices being raised by a cumulative Rs 4.75 this year.

Oil firms had on June 1 raised petrol prices by 75 paise, excluding VAT, and followed it with a Rs 2 per litre increase on June 16, a Rs 1.82 increase on June 29, Rs 1.55 hike on July 15 and 70 paise increase from August 1.