Whalesbook
Nayara Energy is set to close its 20 million tonnes-a-year Vadinar refinery in Gujarat for approximately 35 days starting in early April. This planned maintenance will remove about 8% of India's total refining capacity from the market.
The shutdown was previously postponed last year due to European sanctions that affected key vendors supplying maintenance chemicals and catalysts. With most pre-maintenance tasks now complete, Nayara is proceeding, even with ongoing global supply chain pressures.
Fuel Supply Crunch Amid Global Pressures
The company's output primarily serves the domestic market, with limited exports following earlier sanctions. A significant portion supplies state-run refiners and Nayara's own network of nearly 7,000 petrol pumps. While Nayara states it has sufficient product reserves to maintain stocking levels, industry executives are concerned.
This outage occurs when India's crude oil imports have already seen a substantial decline, and the supply situation for LPG is described as worrisome. The removal of a large refinery's capacity could therefore significantly strain domestic fuel availability.
Margin Pressure and Price Volatility
Globally, refined products such as aviation turbine fuel, petrol, and diesel have become more expensive. This price surge contrasts with unchanged retail fuel prices in India, creating substantial losses for both state-run and private refiners operating on higher crude costs. The extended refinery shutdown is likely to intensify this margin pressure and could eventually impact consumer prices if supply gaps are not adequately filled.