India saw its oil production fall by 6% and natural gas production drop by 5% in 2020 on the back of Covid-19 pandemic, said the Economic Survey.
The third-largest energy consumer in the world after the USA and China, India’s indigenous crude oil production declined to 32.17 Million Metric Tonnes (MMT) in FY20 as against 34.20 million metric tonnes in FY19.
“The decline in production is mainly on account of the spread of Covid-19. Therefore, production is expected to return to normalcy given the economic recovery,” said the Economic Survey. The Indian energy consumption basket is primarily dominated by Coal and Crude Oil.
Of the total crude oil and condensate production, 64.1% was from Oil and Natural Gas Corporation, 9.7% from Oil India Ltd and 26.2% from the Production Share Contract (PSC) regime.
Natural Gas production on the other hand saw a drop of 5% during FY20, at 31.18 Billion Cubic Meters (BCM) as against 32.87 BCM in FY19.
“Of the total production of natural gas, 76.1% was from ONGC, 8.6% from Oil India and 15.3% from the PSC regime. During April-December 2020, gas production was 21.13 billion cubic metres which was 11.3% lower than the production during the same period in FY20,” the Survey said.
In the April-December period of FY 2021, overall consumption of all petroleum products has fallen by 12.6% but has recovered to 87.2% of the consumption, which was prevalent during the same period last year, said Care Ratings in a report, adding that consumption of petroleum products has been increasing as the economy has been easing restrictions and opening up. Production of refinery products/petro products has fallen by 13.5% during April-December FY21.
With the outbreak of the Covid-19 pandemic across the world and consecutive nationwide lockdown imposed in the country, Indian refineries have been operating at reduced capacities. Fall in demand has led to refiners trimming their capacity utilisation in order to remain afloat and protect their margins.
On Friday, state-run Indian Oil Corp Ltd said its profit more than doubled for the third quarter, at ₹49.17 billion against ₹23.39 billion a years ago. This was helped by an increase in the value of its inventory due to a jump in crude oil prices.