However, diesel rates will go up by 50 paisa per litre in line with the practice of raising prices by small quantum every month to wipe away subsidy on the fuel.
State-owned oil firms are due to announce revised petrol and diesel prices on March 31.
"Rupee has appreciated to Rs 60.50 to a US dollar from Rs 61.44 and simultaneously international gasoline rates have dipped from USD 118.09 per barrel to USD 115.73. The twin factors will lead to a reduction in petrol price on Monday," a source with direct knowledge of the development said.
The government, in June 2010, had given oil firms freedom to fix petrol prices on 1st and 16th of every month based on average global oil prices and foreign exchange rates in the preceding fortnight.
It had in January 2013 authorised oil firms to hike diesel prices by 40-50 paisa per litre every month till such time that the losses on the fuel are wiped out. Diesel prices have risen on 14 occasions since then.
Election Commissioner H S Brahma, who had earlier this month stated that government cannot discontinue the monthly increases in diesel prices as it would tantamount to populism, today said oil companies can revise petrol prices in line with the practice they have been following since June 2010.
Oil companies can revise petrol prices without coming to the Election Commission, he said.
Petrol and diesel prices were last revised on March 1 when rates where hiked by 60 paisa and 50 paisa respectively. Petrol currently costs Rs 73.16 a litre in Delhi while diesel is priced at Rs 55.48 per litre.
Since January 2013, diesel rates have risen by a cumulative Rs 8.33.
Oil firms currently lose Rs 7.16 per litre on sale of diesel but the losses will come down significantly on back of softening international oil rates and rupee appreciation.
On the strength of softening oil rates and rupee appreciation, Oil Minister M Veerappa Moily has informed Prime Minister Manmohan Singh that there is no likelyhood of a hike in petrol prices during the next two months when the ruling Congress party faces a tough general elections.
Sources said he has however stated that it was not possible to reverse the Janaury 2013 decision of the Cabinet Committee on Political Affairs (CCPA) that allowed oil companies to raise diesel price by 40-50 paise per litre each month until the under-recovery or revenue losses were wiped out.
If the government were to decide on halting the monthly diesel price increases, an approval of the Election Commission will be required, he told the Prime Minister.
Elections to elect a new government at the Centre will begin on April 7 and end on May 12.
"If they (oil companies) are going (for petrol price revision) under the market driven force, so they are welcome. I mean there are a certain area, where market takes the precedence," Brahma told reporters on sidelines of a CII event here.
He said the Election Commission will not interfere if the oil companies operate under the stated policy.
"Let them do their job properly. Thats all. We are here only to ensure that everybody does their job. Election Commission will do their job. RBI will do their job. Petroleum ministry and oil companies will do their job. Decision is very simple and clear," he added.