The city gas distribution (CGD) volumes witnessed a significant improvement in the second quarter of financial year (FY) 2021. The recovery has been evident from October and November 2020. Both the compressed natural gas (CNG) and piped natural gas (PNG) have shown strong signs of recovery. While CNG and PNG(D) segments are highly competitive due to domestic allocation, PNG (I) is expected to continue to face pressure due to its non-competitiveness against liquid fuels.
The outbreak of novel corona virus caused a worldwide economic slowdown, with gas sector being no exception. The demand from CGD and industrial sector witnessed sharp decline since March 2020. Further, transmission line capacity utilization had declined to 30-40 per cent lower volumes. Restriction on movement of men and material further delayed project execution. However, with the easing of lockdowns, the transmission lines are now operating at 95-100 per cent volumes as compared to pre Covid 19 levels. Going forward, CNG demand is expected to increase given the favorable economics and preference of CNG vehicles for personal mobility.
In the 16th edition City Gas Distribution in India virtual conference organised by India Infrastructure Publishing, Prashant Vasisht, Vice President and Co-Head, Corporate Ratings, ICRA Limited made a presentation on the key trends, developments and post Covid-19 outlook for CGD in India.