Aviation Turbine Fuel, or ATF, price at Delhi was reduced by Rs 2169.13 per kilolitre, or 2.8 per cent, to Rs 74,072.20 per kl, according to Indian Oil Corp, the nation's largest fuel retailer.
The reduction follows two rounds of price hikes - Rs 597.48 per kl or 0.8 per cent increase on December 1, 2013 and Rs 2,036.59 per kl, or 2.74 per cent hike on January 1, 2014.
ATF prices had touched a life time high of Rs 77,089.42 per kl in October last year following five consecutive increases since June as the rupee depreciated against the US dollar, making oil imports costlier.
However, the rupee's appreciation thereafter helped trim cost, leading to a steep 4.5 per cent cut in prices in November. However, rates have been increased in subsequent months as the rupee value dipped marginally.
In Mumbai, jet fuel costs Rs 76,524.33 per kl from today as against Rs Rs 78,783.83 per kl previously, IOC said.
Rates at different airports vary because of difference in local sales tax or VAT.
Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will reduce the fuel cost of the cash-strapped carriers.
No immediate comments were available from the airlines on the impact of the price hike on passenger fares.
The three fuel retailers -- Indian Oil Corp, Hindustan Petroleum Corp Ltd (HPCL) and BPCL -- revise jet fuel prices on the first of every month, based on the average international price in the preceding month.