GAIL India Limited, a state owned gas utility sees its gas demand returning back to pre-Covid-19 levels by the end of the recent quarter as the expansion of the city gas network will offset shrinking consumption, E S Ranganathan, its Director (Marketing) said on Thursday.
The country’s largest natural gas marketing and transporting company, GAIL, sold around 113 million standard cubic metres per day of the fuel before the coronavirus outbreak.
“We (GAIL) have come back to more or less 95 per cent level,” he stated at FIPI’s Young Professionals Forum. “It is going to come back to 100 per cent level by the end of this quarter.” GAIL saw gas demand almost halving when a nationwide lockdown was imposed beginning March 25 to contain the spread of coronavirus. Industries that used gas as feedstock shutdown and CNG-run buses and vehicles went off the road.
With the restarting of economic activity and unlock phases which began in May and June, the demand started coming back, said Ranganathan by adding that GAIL is at present selling gas at almost 95 per cent of pre-Covid-19 levels.
The most prolonged reduction in gas demand came from the city gas distribution sector that sells CNG to automobiles, piped cooking gas to households, and provide fuel to hotels and other industries in towns.
Ranganathan said that the reduction in demand in existing city gas networks would be offset by new demand from newer areas where the network is being expanded now.
City gas networks are mainly concentrated in cities like Delhi, Gujarat, Mumbai and few others and licences has been given to roll out the same in other areas.
“As many as 475 CNG stations and 1 lakh households were added last fiscal and the same trend is likely in current fiscal,” he informed. “The demand destruction will be offset by an increase in geographical reach.” Ranganathan said that the gas consumption for the industry as a whole is likely to return to normal by the end of the financial year.
“GAIL will see its gas sales returning to pre-Covid levels by end of the quarter and for the industry as a whole it will be by the end of the financial year,” he said.
Speaking at the same forum, Vinod S Shenoy Hindustan Petroleum Corp Ltd (HPCL) Director (Refineries) said that “huge demand destruction” of liquid fuels such as petrol, diesel, and ATF happened after lockdown.
Demand declined by as much as 70 per cent but after the unlock and lifting of restrictions, it has come back to 72-80 per cent.
“We expect demand going up to 90 per cent in the fourth quarter (of current fiscal),” he stated.
Sales of petroleum products in May 2020 were around 77 per cent compared to May 2019 and sales in June 2020 were around 91 per cent as compared to June 2019.
While, with some states re-imposing lockdowns, the demand for all petroleum products has come down to 80-82 per cent.
For reaching Pre-Covid-19 level public transport and offices will have to resume. Also, the aviation sector has to return to normal.