Gas distribution volumes hit by Covid-driven lockdowns, says ICRA

The city gas distribution (CGD) sector's domestic gas volumes declined by 12 per cent month-on-month to 15.2 million metric standard cubic metre per day (MMSCMD) in April as transportation and passenger mobility segments were hit the hardest by lockdowns, according to investment information firm ICRA.

However, this remains higher than the consumption of 4.2 MMSCMD in April last year.

CNG volumes declined further last month as the Covid-19 wave intensified and more states imposed lockdowns. While the lockdowns have resulted in reduced industrial activity, said ICRA, the impact has not been as severe as in 2020.

Thus the drop in regasified liquefied natural gas (RLNG) consumption for CGD entities remained lower than that of domestic gas with volumes remaining roughly stagnant since February.

About 49 per cent of gas required by CGD sector is sourced from RLNG imports.

Sabyasachi Majumdar, Group Head and Senior Vice President at ICRA, said CNG volumes are expected to start recovering from the lows of May as several states have begun easing restrictions amid a decline in infections.

"While industrial activities have reduced, they have not halted in a manner similar to that in 2020, resulting in a relatively lower drop in industrial piped natural gas consumption," he said.

Majumdar said while commercial volumes were severely impacted, domestic volumes remained resilient.