India's city gas volumes dip sharply in May: ICRA
Gas volumes in India's city gas distribution (CGD) segment declined 20-25% month/month in May but are likely to have recovered in June, Prashant Vasisht, vice president and co-head, corporate ratings, ICRA told NGW. The volumes had dropped 12% m/m in April to 15mn m3/day.
The April and May volumes were impacted as major city gas consuming states like Gujarat, Maharashtra, Uttar Pradesh and the Delhi National Capital Region were severely hit by the second wave of COVID-19. These states had imposed lockdowns to curb the spread of infections. CNG volumes have declined as transportation and passenger mobility segments were severely hit.
June has seen large-scale relaxation in restrictions as infections have declined and mobility and industrial activity have been inching towards normalcy, boosting volumes in CGD segment.
“With lockdowns gradually lifting in states such as Delhi, it is expected that June 2021 should be better than May 2021. Industrial activity is expected to pick up and CNG volumes are expected to rise as a result of improvements in the transportation and passenger mobility segments,” Vasisht said.
ICRA expects volume to continue to improve in the CGD sector in the coming months but the third wave of COVID-19 can have an impact.
“As infections have steadily declined over the last few weeks, volumes are expected to rise in forthcoming months. For the calendar year 2021 and financial year 2022 (April-March) would have higher volumes than the calendar year 2020 and financial year 2021,” he said. “However, the situation remains dynamic and any potential third wave could have a big say on the full-year demand.”
According to Vasisht, CNG volumes had declined significantly more than industrial piped gas volumes. "As a result, industrial piped gas volumes are expected to reach pre-second wave levels faster due to lower dip," he said.