Nayara Energy Expands and Diversifies to Meet India's Growing Energy Demands

Nayara Energy, the country's second-largest single-site oil refinery, is embarking on expansive measures to meet India's surging energy demands and strengthen its presence in the petrochemical and alternate energy sectors.

With a current network of 6,300 retail outlets, Nayara Energy aims to expand this network by over 50% by 2030, according to Prasad K Panicker, Chairman and Head of Nayara Energy. The company plans to achieve this growth through a franchise model, enhancing agility and speed in launching outlets. In support of these retail operations, Nayara Energy has operationalized company-owned depots in Warda, Maharashtra, and Pali, Rajasthan.

Nayara Energy, operating a 20-million-capacity oil refinery, is pushing forward with plans to commission a polypropylene unit in Vadinar, Gujarat, with an anticipated completion date in the first half of the calendar year 2024. This project involves a total investment of $750 million, as stated by Panicker.

Simultaneously, the company is exploring initiatives to future-proof its network, including non-fuel retail opportunities and alternate fuels such as solar installations, green hydrogen, and electric vehicle (EV) charging points. Non-Fuel Retail (NFR) opportunities in categories like food, auto services, and other services are being tested through a pilot program before a mass rollout across the network.

Panicker emphasized Nayara Energy's strategic vision to diversify its product portfolio and capitalize on opportunities in the high-growth petrochemical industry while addressing domestic energy needs. The company remains open to exploring expansion opportunities aligning with its long-term goals and market dynamics.

Despite geopolitical and macroeconomic developments, Nayara Energy has not experienced disruptions in crude supply over the past couple of years. Panicker expressed confidence in navigating challenges, stating that the complex coastal refinery continually optimizes its crude diet based on economics, diversity, and product requirements.

Addressing declining export volumes, Panicker attributed the reduction to the company's focus on meeting the rising fuel demand within the country. As a significant downstream player, Nayara Energy contributes approximately eight percent of India's refining output. Ongoing projects include the revamping of the existing Vacuum Gas Oil Mild Hydrocracking unit to increase supplies of High-Speed Diesel.

While acknowledging the trend towards hybrid and electric vehicles, Panicker remains optimistic, pointing out that India's per capita vehicle penetration and fuel consumption are still among the lowest. He anticipates an imminent demand growth as the country progresses towards becoming a developed economy.

HBL