Petrol price was on Friday hiked by 75 paise and diesel by 50 paise a litre as rise in global oil rates and fall in rupee value increased the cost of production.

The hikes, effective midnight tonight, are excluding local sales tax or VAT and actual increase will be higher and vary from city to city.

Petrol price, which was last hiked by 41 paise excluding VAT on December 21 as government raised commissioned paid to petrol pump dealers, will cost Rs 72.43 a litre in Delhi from midnight tonight, up 91 paise from Rs 71.52 currently.

The price of diesel in Delhi will be hiked by 56 paise, including tax, to Rs 54.34 per litre, while it will cost Rs 61.42 a litre in Mumbai as against Rs 60.80 currently.

Diesel price increase is in line with the January 2013 decision of the government to raise rates by up to 50 paise per month till such time that the entire losses on the fuel are wiped out, and prices made market determined.

Announcing the price hike, Indian Oil Corp, the nation's largest fuel retailer, said that even after the 12th price hike since last January the oil companies are incurring Rs 9.24 per litre loss on sale of the fuel.

Officials said the price revision was due on January 1 but the oil companies did not change rates as they were wary of the decision being dubbed as 'New Year Gift' to consumers.

The Diesel price was last hiked by 10 paise on December 21 when the commission paid to petrol pump dealers was increased by the government.

Since last January, diesel rates have risen by a cumulative Rs 7.19 this year.

"Since the last price change, international prices of gasoline (petrol) have increased from about USD 115 per barrel to about USD 116.6, and the rupee-US dollar exchange rate has depreciated from Rs 61.88 to a US dollar to Rs 62.00," IOC said in the statement.

There is a continued volatility in the international oil prices because of geopolitical and economic developments around the globe, it said.

On diesel, it said, the government had on January 17, 2013 authorised oil marketing companies to increase the retail selling price within a small range every month.

"Accordingly, since then, retail diesel prices are being revised every month.... Even after the current increase, under recovery (loss) on diesel shall stand at Rs 9.24 per litre," it said.

Besides diesel, the state-owned oil firms are losing Rs 37.33 a litre on sale of kerosene through public distribution system (PDS) and Rs 762.50 per 14.2-kg domestic cooking gas (LPG) cylinder.

"For the (financial) year 2013-14, IOC is expected to incur under-recovery (revenue loss) of Rs 74,700 crore on sale of three sensitive products," the statement said, adding that the industry would end the year with Rs 1,44,800 crore loss.

The movement of prices in the international oil market and the exchange rate are being closely monitored and developing trends of the market will be reflected in future price changes, IOC added.