Fuel prices are expected to vary from one day to the next under a new pricing system. Photo: iStock
Fuel prices are expected to vary from one day to the next under a new pricing system. Photo: iStock

The ongoing lockdown in India to contain the spread of Covid-19 is leading to a drastic fall in energy consumption as factories and offices remain shut, trains and flights are canceled and far fewer vehicles are on the road. The state-owned oil explorer Oil and Natural Gas Corporation has been forced to cut natural gas production by over 15% as factories remain closed, Press Trust of India reports.

Prior to the lockdown, which came into effect on March 25, the corporation produced 64.3 million standard cubic meters of gas per day (mmscmd), but it has reduced the flow to 53.4 mmscmd. Gas sales are down to 40 mmscmd against 50 mmscmd previously.

The company has reportedly received requests from customers for a reduction in gas supplies and some supply reduction requests have been lodged with the gas transporter GAIL. These customers run small companies that have stopped functioning because of the lockdown, and city gas distributor have seen volumes vanish after compressed natural gas CNG vehicles went off the road.

Prime Minister Narendra Modi announced a three-week lockdown on March 24, but even before that some states had imposed curbs on the movement of vehicles and public transport to slow down the spread of the virus. Offices and factories, barring those involved in essential supplies, were shut and people were told to stay at home.

The lockdown is coming to an end on April 14, but there are indications that it might continue for another two weeks. Many states have already extended it to April 30.

Power consumption

The lockdown has also taken its toll on power consumption. The country’s daily power consumption has fallen by around 26%, according to Power System Operation Corporation. This is attributed to the slump in economic activity in the wake of the coronavirus outbreak.

The drop has already pulled spot power prices to the lowest level in more than two years and could spell further financial troubles for the ailing discoms.

The corporation data shows that the steepest decline in consumption (35%) was recorded in the western part of the country. This region, which includes Gujarat and Maharashtra states, is home to the bulk of India’s industrial activity.

Fuel intake

The country’s fuel consumption in March was down 18% against the same period last year, the biggest decline in more than a decade, due to the stoppage of economic activity and travel. The consumption of petroleum products this month was 16.08 million tonnes as diesel, petrol and aviation turbine fuel demand fell.

Diesel demand contracted by 24.23% to 5.65 million tonnes. This is the biggest fall as most trucks went off the road and railways stopped running trains.

Petrol sales dropped 16.37% to 2.15 million tonnes as the 21-day nationwide lockdown took most cars and two-wheelers off the road.