The migrant crisis amid Covid pandemic resulted in a big shift in energy demand (electricity and petroleum) of the country besides significantly impacting its distribution among states.

The consumption data released by the National Load Dispatch Center (NLDC) shows a clear shift in demand for electricity from industrialized states to migrant states all through the year.

Similarly, the demand for petroleum products too changed with curbs on mobility during the pandemic, shows the Petroleum Planning and Analysis Cell (PPAC) data. Air Turbine Fuel (ATF) and High Speed Diesel (HSD) were the worst affected categories among petroleum products.

By June lockdown was eased across the country, which had a normalizing impact on demand and pattern of consumption of electricity and petroleum products. It took further four months to reach levels similar to the same months the previous year (2019). But, there was a sudden decline in demand in November which increased uncertainty in the pattern of recovery of the demand for electricity and fuel.

1. Change in power demand

After migrants started moving back to their home states in April and May, the migrant home states saw a surge in power demand. Simultaneously, the demand declined in the most industrialized states such as Maharashtra, Gujarat and Tamil Nadu. The effects became apparent only after the Union government started Shramik special trains in June for the migrants to go back to their hometowns.

In June, only four states – Tripura, Meghalaya, Nagaland and Jharkhand – out of 35 states and Union Territories showed a positive growth in demand for power compared to the same month the previous year. Heavily industrialized states of Maharashtra (-2746 MU), Gujarat (-1707 MU) and Tamil Nadu (-1051 MU) saw the highest departure as compared to corresponding month in 2019. The condition remained unchanged for the next two months.

In July and August, while these industrialized states were struggling to restore demand, the migrant home states like Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar and Jharkhand showed positive growth in electricity demand, shows the NLDC data. A complete shift in demand was observed from July till September.

India registered an overall drop of about 4.6 per cent in electricity demand in 2020 as compared to the previous year. The year-on-year demand has fallen across regions – north, west, east, south and north-east – according to the data provided by the NLDC.

The north-east region experienced the highest decline at 19.81 percent while the north saw the least decline of 3.22 percent in electricity demand. The west, south and east regions reported drops of 4.45 percent, 4.81 percent and 6.52 percent respectively. The country’s overall electricity demand fell by 4.5 percent (or 51,420 MU) compared to the previous year. The countrywide consumption of electricity stood at 10.59 lakh MU for the year 2020.

It is interesting to see the trajectory of daily maximum demand of electricity in 2020 in different regions of the country. Though the demand fell, the distribution of demand changed drastically across regions. Prior to lockdown, the west region had the maximum demand (56,086 MU) followed by south (51,293MU) and north (41,710MU). This changed after lockdown, as the north reported maximum demand followed by the west and South over the last few months.

The month-wise data shows the negative change in demand began in March which continued till August. April saw the highest departure of almost 25% (-24.97%) from the same month of the previous year. It was followed by May (-15.92%), June (-10.62%) and March (-9.82%) over the last few months. A positive growth in demand in October showed some signs of recovery which was shattered again by the negative growth in demand in November. The December data when released might give us a clearer picture of the trend of the recovery.

2. Change in petroleum product consumption

Reduced consumption of petroleum products is one of the major indicators of overall economic slowdown in the country. Usually, the consumption of these products increases gradually year-by-year. However, in 2020, the trend took a different turn. It saw a drop in the month of March after the lockdown and then took seven more months to recover and reach the 2019 levels, according to the data released by the Petroleum Planning and Analysis Cell (PPAC).

At the beginning of the year i.e. in January, petroleum consumption was 18,746 metric tonnes compared to 18,520 metric tonnes the previous year. It remained a little above the previous year in February but plunged by more than 4,000 metric tonnes in March. The consumption in 2020 was 15,931 metric tonnes against 19,564 metric tonnes in 2019. It further went down till the lowest levels of the year in April (9,403 metric tonnes) and then began its recovery in May.

The Union government began the process of Unlock in June which gave pace to economic activities in the country. Despite partial re-opening of businesses, it took four more months for the recovery of petroleum consumption in India. In mid-September, it crossed the levels of 2019 consumption and by the end of October it was a little bit above the previous year’s figure. It declined again in November. This suggests that the overall economic activities are still struggling to regain the momentum after almost nine months post lockdown.

High Speed Diesel (HSD), the most consumed product of all the petroleum products, saw almost similar trend of consumption against overall petroleum products. The HSD saw a drop of more than 55 per cent in consumption in the month of April. It is used in more than eighty per cent of the transportation vehicles in India that ferry goods across the nation for trade purposes. The HSD took four more months to recover the consumption levels but again observed a drop in November. The consumption for that month was 7,042 metric tonnes against 7,566 tonnes of the 2019 of the same month.

The Aviation Turbine Fuel (ATF) or the fuel used in aeroplanes was the first to bear the brunt of lockdown. Moreover, it saw the most lasting impact on the industry and recovery of the same is still far away than the rest of the petroleum industries. The ATF consumption dropped one third in the last week of March as the domestic flights were banned following the lockdown. In April, it plunged to the lowest levels to just 55 metric tonnes in a month. This was a drop of more than 90 per cent (91.48%) compared to 646 metric tonnes of the same month in 2019.

On May 25, the Ministry of Aviation gave a nod for restarting domestic flights. However, the curbs were so much that the aviation could hardly see the path of recovery even after the resumption of the flights. After June, the ATF consumption started increasing gradually. But when compared to previous year’s consumption during the same period, it still has a long way to go. According to PPAC figures, the ATF consumption of November 2020 was 372 metric tonnes compared to 709 metric tonnes of the previous year.

Domestic gas or Liquid Petroleum Gas (LPG) was the only petroleum product to have reported a spike in consumption in 2020. It saw exactly the reverse trend than the rest of the products throughout the year. The LPG consumption in January was a little above the previous year while in February it was 2,106 metric tonnes compared to 2,210 metric tonnes of the same month of the previous year.

March saw a slight increase (1.3 per cent) in consumption of LPG. Further, for the next three months, until the lockdown was over PPAC observed a steep increase in usage of LPG across India. The consumption was hiked by 11.21 per cent, 11.78 per cent & 15.11 per cent during April, May and June respectively. Even in July it remained a bit more than the previous year’s figure. Until September, while the rest of the products were on the path of recovery the LPG maintained the consumption levels as that of July. Lastly, in November PPAC reported 4 per cent increase in demand with 2,253 metric tonnes of usage.

The rest of the products that include petrol, bitumen, naphtha, petroleum coke and lubricants- greases observed quite a similar trend of decline and recovery in usage.