Nayara Energy, India's second-biggest private oil refinery, reported a sharp decline in fuel exports as domestic sales surge on retail network expansion and demand rise, a company official said.
During calendar year 2022, Nayara reported 61 per cent of sales from the domestic market and the remaining 39 per cent from exports of all products including jet fuel (ATF), diesel and petrol.
Out of the total 6.91 million tonne of fuel exported by Nayara during 2022, diesel exports stood at about 4.39 million tonne or roughly 64 per cent of all exports.
More than 84 per cent of all fuel exports were to Asia, the Middle East and Africa with only minuscule volumes going to the EU, a company spokesperson said.
Nayara sold the bulk of the fuel it produced from its 20 million tonne a year oil refinery at Vadinar in Gujarat through its 6,500+ petrol pumps - the largest fuel retail network by any private company.
During January-March 2023, subsequent to meeting domestic demand, Nayara Energy's biggest primary export markets have been the Middle East and Africa contributing about 84 per cent to the total exports, the spokesperson said adding domestic sales during the quarter were 67 per cent while exports accounted for the remaining 33 per cent.
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Subsequently, domestic sales surged to 73 per cent of all fuel sold in April and to 79 per cent in May. Exports on the other hand declined to 27 per cent of all fuel sold in April and 21 per cent in May, the official said.
During April 2022 to March 2023, Nayara supplied a minuscule quantity of 0.07 million tonne of diesel - a mere 1.7 per cent of the total diesel exports - to Gibraltar (Europe) via international traders. On the other hand, no gasoline (petrol) has been exported to the EU.
The official said Nayara is committed to securing India's energy needs, as can be seen by the increase in its domestic supplies year-on-year. There has been a decline in the proportion of export sales from 46 per cent in calendar year 2019 to 39 per cent in CY2022 as it opened more retail fuel stations.
The company is primarily focused on catering to the domestic market through institutional business, sales to other oil companies, and through its own retail chain.
"India, structurally, is long on diesel and the same is to be exported after satisfying domestic demand," the spokesperson said.
While historically Nayara's natural export markets have been the Middle East and Africa that have a consistent appetite for its products throughout the year, it is commercially unviable for Nayara to cater to the seasonal requirements of EU markets (winter-grade diesel).
"As a major downstream player, delivering 8 per cent of India's refining output, Nayara Energy is primarily focused on catering to the growing domestic demand. This is evident from our high domestic sales within the country through our retail outlets, institutional business and oil companies," the spokesperson said. "Only the product surplus is exported to ensure optimized supply chain management."
Russia's Rosneft and Kesani Enterprises Co Ltd, a consortium led by Trafigura Group and UCP Investment Group, each hold a 49.13 per cent stake in Nayara.
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