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FACTBOX-India's energy demand recovery hits speed bumps due to COVID-19 curbs

04/29/2021 | 09:38pm EDT

(Repeats factbox published on Thursday with no changes to text)

* Mobility restrictions to curb gasoline, jet fuel demand

* Diesel demand to rise in Q2, but by less than expected -Woodmac

* Gas and coal consumption to fall in coming weeks-analysts

SINGAPORE/CHENNAI, April 29 (Reuters) - India is expected to consume less energy -- from petrol to coal -- than previously expected this year as it battles a massive second wave of COVID-19 infections, which has forced many states to reimpose lockdowns and curfews.

The energy hungry nation's bumpy economic recovery and surging coronavirus cases in Brazil and Japan are already keeping a lid on global oil prices.

Lockdowns have been put in place in Delhi, the industrial state of Karnataka and the southern state of Maharashtra and other regions are also mulling restrictions.

As a result, analysts expect various commodity markets to suffer in coming months.


Analysts expect demand for transportation fuels to have dropped in April from March, with a sharper slump seen in May due to more impending restrictions.

Consultancy Wood Mackenzie sees India's gasoline demand falling 6% in the second quarter from the first quarter.

JBC Energy has lowered its estimate for India's annual gasoline demand by 50,000 barrels per day (bpd) due to the resumption of lockdowns.

India consumed 7.79 million tonnes (731,000 bpd) of petrol in the first three months of the year.

The surging infection numbers and renewed mobility-restricting measures have "forced us to revise down Indian gasoline and gasoil demand" estimates for 2021, said JBC's senior analyst Eugene Lindell.


Woodmac research analyst Qiaoling Chen sees a 1% increase in diesel demand in the second quarter from the first quarter, but said it "could have been much higher."

For now, "because the lockdowns and night curfews are aimed at restricting personal mobility (rather) than industrial activities, we do not expect a huge decline in diesel demand in Q2 as compared to Q1," said Chen.

Six of the top fifteen petrol and diesel consuming districts in the pre-pandemic era are either in the states of Karnataka or Maharashtra, both of which have imposed curbs on movement that could hit fuel demand.

The country's biggest petrol and diesel guzzling district of urban Bengaluru is under a total lockdown.


India's jet fuel demand is also taking a beating after domestic flights have been scaled down this month, while several countries have banned or suspended international flights from the South Asian nation.

Woodmac expects India's jet fuel demand to decline 6.5% in the second quarter from the first three months of the year.

India's scheduled flight seat capacity dropped 8.7% in the week to Monday compared with the previous week, according to aviation data firm OAG.


As the number of COVID-19 cases rise exponentially, more states will likely impose lockdowns which may last for several weeks or months, hampering gas demand, said FGE LNG analyst Ervin Wee. India is the world's fourth largest LNG importer.

"The restrictions would curb gas demand in the power, commercial and industrial sectors and we will be revising downwards our forecast for LNG consumption in those sectors," Wee said, adding he did not expect restrictions to cause "a sharp decline in LNG demand such as in 2020".


Usage of electricity in India - most of which is produced using coal - has been falling since the end of the second week of April, government data shows, amid a higher virus spread that has curbed some economic activity.

India is the world's second biggest importer, consumer and producer of coal, behind China.

Puneet Gupta, founder of online coal marketplace CoalShastra, said curbs could dampen demand for imported coal in the coming weeks, but expected it to rebound soon after.

(Reporting by Sudarshan Varadhan in Chennai, Koustav Samanta and Jessica Jaganathan in Singapore; Editing by Florence Tan and Ana Nicolaci da Costa)

© Reuters 2021
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