New Delhi, Sep 30 (PTI): Petrol price was today cut by Rs 3.05 per litre, the first reduction in rates in over five months and the steepest in over five years, while diesel prices were raised by 50 paise a litre.

The price changes announced by oil companies are excluding local sales tax or VAT and will be effective midnight tonight.

While petrol price cut has been made possible because of appreciation in rupee value against US dollar, diesel rates are being hiked as per the practice of increase in rates by small monthly doses to cover losses.

The petrol price in Delhi will be cut by Rs 3.66 to Rs 72.40 per litre, while it will cost Rs 79.49 per litre in Mumbai as against Rs 83.63 currently.

The cut in petrol price is the first reduction in rates since May. Petrol price was last cut on May 1 by Rs 3 per litre, the steepest reduction in rates in over five years.

Since June petrol prices have been raised seven times, totalling Rs 10.80 per litre, excluding VAT (Rs 13.06 after including state tax) as the rupee depreciated sharply against the rupee.

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.

The diesel price in Delhi has been hiked by 57 paise to Rs 52.54 per litre while it would cost Rs 59.46 in Mumbai from tomorrow as compared to Rs 58.86 currently.

Today's hike in the ninth since the January 17 and most of the losses on diesel sales should have been wiped out by now to make the fuel market priced. But the fall in rupee, around 25 per cent since April, has worsened the situation and losses mounted to Rs 14.50 per litre.

However, the recent firming of rupee against US dollar has trimmed these losses to Rs 10.52. Diesel rates have risen by a cumulative Rs 5.39 this year.

Alongside, oil firms also raised rates of non-subsidised domestic cooking gas (LPG) that households buy after exhausting their quota of 9 subsidised or cheaper cylinder. Price in Delhi was hiked by Rs 71.50 per 14.2-kg cylinder to Rs 1004.