NEW DELHI: India’s electricity consumption rose at the fastest rate in three months in January but a sharp decline in demand for diesel, a key indicator of economic activities, and tapering petrol sales indicate economic recovery remains shaky.
Electricity consumption was in excess of 111 BU (billion units) in January, indicating a 6% growth over 105 BUs in the same month of 2020. Peak power demand also clocked a growth of nearly 11% at nearly 190 GW (gigawatts) January against almost 170 GW in the same month of 2020.
Peak power demand, highest energy supplied in a day, had hit an all-time high of 189.64 GW on January 30.
Officials attributed the growth in power consumption to a resurgence in industrial activities. Grid data indicate industrialised southern region consuming more power than other regions.
But monthly January data of state-run fuel retailers, who dominate 90% of the market, shows a 5% drop in sales from a month ago, reversing the sustained uptick since September 2020.
Diesel demand had spiked nearly 22% month-on-month in September 2020 after the government began lifting Covid restrictions.
Growth in petrol sales too tapered off by over 3% from a month ago, in contrast to a 6-8% rise since August.
After the unlock process began, petrol demand had spiked 10.5% in September but fell back into a single-digit growth pattern.
On yearly basis, however, January diesel demand was 2.3% short of the year-ago period, while petrol was 2.3% higher.
“Diesel demand should have risen as heightened industrial and business activities would have spurred increased movement of raw materials and finished products. The true picture would emerge after February,” one analyst said requesting anonymity.
After six months of decline since March 2020, power demand had rebounded in September with a 4.5% year-on-year growth and jumped nearly 12% in October, the sharpest in eight months.
But the growth again slowed to 3% in November 2020, mainly due to the early onset of winter. In December, however, consumption rebounded with a 5% increase.