India’s energy demand is gradually rebounding as it emerges from lockdown

Officials predict demand will see an uptick in May as planting season begins and a lockdown to stop the virus spread eases

India, a country of 1.3 billion, accounts for a bulk of the world's energy demand. AP Photo

Fuel consumption in India is showing signs of rebounding after witnessing the worst monthly sales in more than 12 years.

Demand in May will be as much as 25 per cent higher than April as planting season begins, requiring tractors and water pumps to burn more diesel. The easing of the world’s biggest lockdown will also bring more trucks back to the road, according to officials at two state-owned refineries.

The world’s third-biggest oil importer saw demand drop sharply  after the government ordered its 1.3 billion people to stay home from March 25 to curb the spread of coronavirus. April consumption fell by half from the previous year to the lowest level since 2007, according to official data released on Monday.

“In about a week, we will see more signs of demand revival as factories restart, construction work resumes and there’s greater freight movement,” said R. Ramachandran, Bharat Petroleum's director of refineries. “Sowing of summer crops in north India will increase use of tractors and water-pumps helping diesel consumption.”

Demand for petrol should improve slightly as lockdown restrictions are eased and passenger movement picks up as factories open up, said M. Venkatesh, managing director at Mangalore Refinery and Petrochemicals. Jet fuel demand remains a problem, and there are limits to how much of it can be blended into diesel, he said.

India’s rebound remains far behind that of its neighbour, China, where traffic in top cities is busier than pre-virus levels. Indian demand will remain well below normal levels even with the rebound, Mr Ramachandran said. Indian refiners have had to seek out tankers to hold oil at sea as every bit of the nation’s onshore storage capacity is filled.

India has extended its lockdown to May 17, but introduced relaxations earlier this month especially for the areas that have been least affected. Those tend to be in the countryside, while the typical urban demand centres of Delhi, Mumbai, Kolkata and Chennai still face harsh restrictions.

“Since a few weeks back we decided to start our economic activities – the transportation activities, the industrial activities in the rural areas of the countryside of India,” oil minister Dharmendra Pradhan said in an online conversation with consultancy IHS Markit. “And gradually we are edging out from the lockdown. Our demand is picking up.”