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NEW DELHI: India’s 40-day long lockdown has resulted in a 30% fall in the country's energy demand, according to Paris-based International Energy Agency (IEA).

In what is being described as a result of the biggest shock since the Second World War, global energy demand is set to plunge this year. Energy consumption, especially electricity and refinery products, is typically linked to overall demand in an economy.

“India’s full national lockdown has reduced energy demand by almost 30%, meaning that with each additional week of lockdown, annual energy demand is reduced by 0.6%. Overall we estimate that an additional month of the restrictions in place as of early April would reduce global annual energy demand by around 1.5%," said IEA in its report on the pandemic’s extraordinary impact across the energy spectrum.

India’s transportation fuel demand has come down with citizens cooped up indoors, though there has been an increase in demand for domestic cooking gas. This has resulted in refinery units operating at around half their capacity. With its industries shut, India’s electricity demand has also taken a hit.

“The impact on Q1 2020 energy demand in India was modest, with demand increasing by 0.3 relative to Q1 2019. The major impact of India’s lockdown on weekly energy demand was only felt after the country moved into lockdown towards the end of March. As the lockdown continues, the impact on energy demand are set to be notably larger Q2 2020," said the report based on an analysis of around 100 days of real-data this year.

India is looking to withdraw the world’s largest lockdown exercise in a staggered manner, beginning 4 May, to breath life into its battered economy.

There has also been a dip in global carbon emissions.

“The covid-19 pandemic represents the biggest shock to the global energy system in more than seven decades, with the drop in demand this year set to dwarf the impact of the 2008 financial crisis and result in a record annual decline in carbon emissions of almost 8%," the report said.

“This would be the largest decrease in emissions ever recorded – nearly six times larger than the previous record drop of 400 million tonnes in 2009 that resulted from the global financial crisis," the report added.

This slump in demand has roiled energy markets. Oil prices have slumped, with Brent crude trading near a 21-year low, and US oil futures being pushed into negative territory - a historic feat. The resultant glut in oil has overwhelmed the world’s limited storage facilities, with ships laden with surplus oil production idling at high seas.

“The report projects that energy demand will fall 6% in 2020 – seven times the decline after the 2008 global financial crisis. In absolute terms, the decline is unprecedented – the equivalent of losing the entire energy demand of India, the world’s third largest energy consumer," the report said.

As the 40-day nationwide lockdown nears an ends, the Indian economy is staring at a precipice.

Swiss bank UBS on Wednesday projected that India's economy will contract 3.1% if mobility restrictions stay in place until end-June and economic activity returns to normal by end-August.

“We expect global electricity demand to fall by 5% in 2020. This would be the largest decline since the Great Depression and would be eight times the reduction in 2009 due to the global financial crisis. In 2009, continued growth in China and India was able to largely offset reductions elsewhere. However, China and India are not in a similar position in 2020," the report said.

The historic collapse in energy prices has also hit the global commodity markets, threatening to tip the sluggish global economy into a deep recession. The global economy is expected to enter recessionary zone in 2020 as countries have shut down normal business activity to fight the covid-19 pandemic.

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