CGD volumes impacted by second wave of Covid-19 induced lockdowns; however, drop is less severe than the first wave: ICRA

India's City Gas Distribution (CGD) requirement has shrunk as a consequence of the next wave of Covid-19.  The states with The maximum penetration of city gas such as Gujarat, Maharashtra, Uttar Pradesh and the NCR region have been badly hit by the next wave of Covid-19 and also have levied lockdowns to suppress the spread of diseases.

Accordingly, Compressed Natural Gas (CNG) volumes have diminished as passenger and transportation mobility segments have been badly hit. Industrial intake has been negatively impacted due to poorer need besides which commercial requirement has significantly diminished. But demand from the national section stays resilient because of more at home dining. The weaker demand for natural gas has led to LNG cargoes being postponed and capacity utilisation of LNG terminals and pipelines has also dipped. 

Giving more insight about the effect on domestic firms, Mr. Sabyasachi Majumdar, Group Head & Senior Vice President in ICRA states,"The effects of the next wave of Covid-19 is not likely to be as intense as that observed in 2020. As anticipated, lockdowns in a variety of cities and states have negatively affected CNG requirement that has diminished by 20-25%. CNG volumes are anticipated to begin recovering from the lows of May 2021 as many states have started easing constraints amid a decrease in diseases. While industrial actions have decreased, they haven't stopped in a way much like that in 2020, leading to a comparatively lower fall in industrial PNG intake. Furthermore, commercial volumes have been badly affected yet domestic volumes have remained resilient."

The CGD industry domestic gas volumes dropped by 12% M-o-M to 15.2 MMSCMD in April 2021 since the transport And passenger mobility sections were hit the hardest by lockdowns.  But, this remains higher than the  Ingestion of 4.2 MMSCMD at April 2020. In May 2021, CNG volumes dropped further as the Covid-19 tide Intensified and more nations imposed lockdowns. Even though the lockdowns have led to decreased industrial action, The effect hasn't been as intense as in 2020. Consequently, the fall in RNLG ingestion for CGD entities stayed Lower than that of national gas, together with volumes staying roughly stagnant because February 2021. Around 49% of the gas needed by the CGD industry is obtained from RLNG imports.