New Delhi: The Government on Wednesday announced a significant cut in petrol and diesel prices of Rs. 2 and Re. 1 a litre respectively, as a result of a suggestion made by the UPA chairperson Sonia Gandhi on Tuesday.

The slash in prices, which comes into effect from midnight on Wednesday, is meant to reflect the decline in world crude oil prices but has taken place just as global markets have once again witnessed a hardening trend.

The reduction brings petrol prices down to Rs. 44.85 a litre in the capital and Rs. 49.67 a litre in Chennai, while diesel will now cost Rs. 31.25 a litre in Delhi and Rs. 35.51 a litre in Chennai.

Oil industry sources say this will reduce the profits being made on petrol sales, but raise the losses currently being incurred on diesel sales.

Petroleum Minister Murli Deora made the announcement in Parliament.

`Slash them further'

PTI reports:

The Communist Party of India (Marxist) welcomed the decision to cut prices of petrol and diesel but said the Government should slash them further.

CPI (M) leader Sitaram Yechury told reporters here that "we expect that the burden would be reduced further on consumers in keeping with international fuel prices."

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