Oil marketing companies have cut petrol prices by 49 paise per litre and diesel will be cheaper by Rs 1.21 a litre even as crude prices in the international market continue to react to Iran nuclear talks.

The reduction follows two rounds of price hikes in February and March and new rates will be effective from Wednesday midnight.

Prices of petrol in Delhi will be Rs 60 a litre(currently Rs 60.49) and diesel will cost Rs 48.50 per litre current price Rs 49.71).

Prior to these increases, petrol price had been cut on ten occasions since August 2014 and diesel six times since October 2014.

Fuel prices would have been lower but for four consecutive excise duty hikes since November totalling Rs 7.75 a litre on petrol and Rs 7.50 on diesel.

Brent crude oil, meanwhile, dropped towards $55 a barrel on Tuesday as Iran and six world powers entered a final day of talks over a nuclear deal that could see the energy-rich country increase oil exports to world markets. A deal in Lausanne could lead to an increase in Iranian crude supply to a market already weighed down by oversupply due to rising US shale production.

Meanwhile, India has bought the first oil consignment for its strategic petroleum reserve and the government on Tuesday allocated Rs4,948 crore. The strategic oil reserves will insulate the country from supply disruptions. India is world's fourth-biggest oil consumer and over 70% is imported.

Underground storages are being built at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka to store about 5.33 million tonnes (28 million barrels) of crude oil. This is enough to meet nation’s oil requirement for 11 days.

The Indian Oil Corp (IOC) bought a 2 million barrel cargo of Iraqi crude from Chinese trader Unipec, which will load in May.

On the domestic front, after facing a drop in crude oil production for the past seven years, government-owned explorer ONGC has surpassed last year’s output of 22.247 million tonne to produce 22.262 million tonne of oil in FY15. The increase is marginal but it indicates ONGC’s efforts to turnaround.

The output from western offshore assets in FY15 is pegged at 14.74 million tonne as against 13.71 million during FY14, recording an increase of around 1 million tonne. Globally, production from similar ageing fields has witnessed decline at an average of 6-7% every year.