Northeast Energy Scenario Part-1: Paradigm shift in petroproduct availability and consumption

Pratim Ranjan Bose

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Energy and infrastructure are two critical elements for growth and prosperity. IRCC has been consistent in shedding light on the spate of developments in India’s northeastern region, which suffered from a paucity of both in the past.

In this episodic report, we will explain the paradigm shift in the region’s energy landscape over the last decade. In part-1 we are dealing with the petroleum product availability and consumption in the Northeast.

 

Till 2014, when the Narendra Modi government assumed power in Delhi, energy scarcity was a common theme in the eight Northeastern states of Assam, Arunachal Pradesh, Manipur, Nagaland, Mizoram, Meghalaya and Sikkim; comprising nearly 8% of India’s area and less than 4% of the national population (Census 2011). 

The gap between the regional and the national averages was evident in almost all segments of energy products and commodities. 

 

Table-1: LPG coverage in NE between March, 2014 and January 2023

StateDomestic LPG connections 31.03.2014 (million)LPG coverage on 31.03.2014 as percentage of householdsActive* Domestic LPG Connections 01.01.2023 (million)LPG coverage on 01.01.2023 as percentage of households

No of household

as per Census 2011 (million)

Arunachal Pradesh0.2281.10.31114.80.27
Assam3.1549.28.35133.26.40
Manipur0.3670.50.65127.40.51
Meghalaya  0.17310.04740.54
Mizoram0.27122.70.34154.50.22
Nagaland0.22  560.3384.60.39
Sikkim  0.13  1080.17141.60.12
Tripura0.40470.7992.90.85
NER4.9252.711.34121.59.33
India166.2567.3313.71127.1246,74

*Active indicates, the subscribers take a minimum of two refills a year. 

Source: Absolute LPG connection data from Indian Petroleum and Natural Gas Statistics 2014-15 and Petroleum Planning and Analysis cell of ministry of petroleum and natural gas, GoI. Household Data from Census, 2011. Compilation by author. 

LPG

As of March 2014, hardly 71% of Indian households had access to cooking gas including both liquefied petroleum gas or LPG (67%) and piped natural gas (PNG) supplies in Gujarat, Delhi, Mumbai etc. The situation was worse in the northeastern region (NER), which reported a distinctly lower average. The gap was most evident in Assam (31.2 million) and Tripura (3.6 million) – together accounting for 76% of the regional population (45.7 million). 

Notably, the historic data on domestic LPG was inflated, due to dual pricing and rampant diversion of subsidized cooking gas for households to commercial usages (as in eateries). The Modi government plugged the loopholes by ensuring one market price for LPG. The subsidy was reimbursed to domestic consumers through direct benefit transfer (DBT). 

Either way, access to cooking gas improved dramatically in the last nine years. As of January 2023, India (127%) achieved full coverage of LPG in households. NER (121.5%) kept up with the national trend. From 49% in 2014, Assam is now operating at 133%, higher than the national average. Tripura is closer to full coverage. Even Meghalaya gave up its fascination for locally available coal for gas.

Petroleum Products

LPG was no exception. 

A comparative analysis of per-capita sales of petroproducts between the financial year 2013-14 (FY14) and the pre-covid year of FY20 will tell, access to energy is increasing at a faster pace in NER than the country (see Table-2). We have kept FY21 and FY22 data out of context, as the covid related restrictions on mobility affected auto-fuel sales during the period. 

Except for Assam, other states in the region are too small. Meghalaya and Sikkim are top tourist destinations. Arunachal and Sikkim have a disproportionate presence of armed forces. And, a substantial population of cars from Assam, refill in Meghalaya due to price arbitrage.  

Keeping this in mind, it is better to focus on Assam where per-capita sales of petroproducts rose by 50% against a national average of 28%. From 49% of the country average in FY14, Assamese consumption improved to 57.5% of the Indian average in FY20. The residual gap is attributed to the lack of industrial activity. 

A dramatic rise in the retail network of oil marketing companies, ensuring the availability of petroproducts in the region, is a primary reason behind the rise in consumption. Between FY17 and FY22, the retail network grew by 39% in the country vis-à-vis 58% in NER (see Table-3). The growth of network is faster in remote states of Arunachal Pradesh, Manipur, Mizoram and Nagaland – which once had very little coverage. 

As of FY27, Sikkim and Meghalaya were amply covered compared to their small population.

 

Table-2. Per-capita sales of petroleum products 

State 2013-14 (KG)2019-20 (KG)Growth (%)
Arunachal Pradesh123.7190.554
Assam60.390.650
Manipur60.393.655
Meghalaya158.1185.717
Mizoram94.7129.236
Nagaland60.886.642
Sikkim156.7214.137
Tripura49.363.128
NER 95.4131.638
All India122.9157.528
Eastern Indian States
Bihar38.35236
Jharkhand76103.636
Odisha87.6143.764
West Bengal74.4101.937
ER69100.345

Source: Indian Petroleum and Natural Gas Statistics for 2014-15 & 2021-22, Ministry of Petroleum and Natural Gas, GoI. 

 

Table-3: Number of retail outlets of petroleum products

State2016-172021-22Growth (%)
Arunachal Pradesh74178140
Assam828131258
Manipur85178109
Meghalaya19827036
Mizoram377294
Nagaland70150114
Sikkim506326
Tripura6810859
NER1410223158
India595958302739

Source: Indian Petroleum and Natural Gas Statistics 2021-22, Ministry of Petroleum and Natural Gas, GoI. 

 

Conclusion : 

Petroproduct shortages are a thing of the past in the Northeast. This is visible even in daily life experiences.  

“There was a time when we used to file a lot of reports on fuel shortages in the region. There were few auto-fuel refill stations beyond the city limits. People selling petrol and diesel, at a premium, in plastic water bottles, was a common sight outside major towns and cities. LPG crisis was a recurring theme. Those days are now gone,” said Bikash Singh, The Economic Times correspondent in Guwahati. 

Singh now rarely files reports on energy shortages. In 2022, Assam suffered one of its worst flood situations in history. Multiple waves of flooding destroyed key rail and road links, inundated cities and towns and killed hundreds. The breach of a dyke in the Barak river, kept Silchar (Assam) submerged for weeks. But, fuel supplies didn’t stop. 

 

*Pratim Ranjan Bose is a commentator, researcher and corporate consultant. He is ‘Lead-Research’ of IRCC.

** Photo by Erik Mclean on Unsplash

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