Petrol price was cut by Rs 1.27 per litre and diesel by Rs 1.17 a litre, the second reduction in rates this month following global cues.
The new rates will be effective midnight of 15 August, said nation's largest oil firm Indian Oil Corp (IOC) in a statement.
Petrol in Delhi will cost Rs 63.20 per litre as against Rs 64.47 a litre currently. A litre of diesel will cost Rs 44.95 as compared to Rs 46.12 currently.
Rates were last cut on August 1 when petrol price was reduced by Rs 2.43 per litre and diesel by Rs 3.60 a litre.
According to the statement released by IOC, a combined impact of depreciation of INR-USD exchange rate and decrease in international prices of both petrol and diesel warranted a downward revision in prices.
Last month, the price of petrol was cut on July 1 by 31 paise per litre and diesel by 71 paise a litre. This was followed by a Rs 2 per litre cut in rates of both petrol and diesel, excluding local sales tax, from July 16 but consumers in Delhi were deprived of the benefit as the Delhi government raised VAT.
As a result, petrol price in Delhi went up by 28 paise a litre after hike in VAT or sales tax on the fuel from 20 to 25 per cent.
Rates of diesel, on which VAT was raised from 12.5 per cent to 16.6 per cent, saw a smaller reduction of 50 paise per litre.
"The movement of prices in international oil market and INR-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes," IOC said.