The price cuts have come after more than a year of hikes. Prices had remained static for last almost three weeks. Prices of petrol and diesel were last reduced on March 16, 2020.
The Oil Marketing Companies reduced the prices of the two fuels on the back of international prices of crude falling to its lowest since February.
The crude oil prices have slipped as fears of another Covid wave grip major markets.
Petrol now retails at Rs 90.99 a litre in Delhi from Rs 91.17 per litre while diesel prices have come down to Rs 81.30 a litre from Rs 81.47.
Prices of petrol and diesel were last reduced on March 16, 2020.
Central and state levies form a major chunk of the fuel prices. The Centre was under pressure to reduce the excise on petrol and diesel to bring down the retail prices.
Finance minister Nirmala Sitharaman, on Tuesday, said that she would be glad to discuss the issue of bringing fuel prices under the ambit of GST in the next GST Council meeting.
Taxes make up almost 60 per cent of the present retail price of petrol and diesel.
