India’s Nayara Energy has increased its fuel sales to state-owned Hindustan Petroleum Corp (HPCL) in response to sanctions on Russian oil exports, according to a government source on Tuesday.
In light of these sanctions, Nayara has been operating its Vadinar refinery, with a capacity of 400,000 barrels per day (bpd), at 70-80% of its total capacity. The government source stressed that enhancing local sales of refined fuels would aid Nayara in maintaining its refinery operations.
“We would like them (Nayara) to operate at as high capacity as it can,” the source, who requested anonymity, stated to reporters.
Unlike other state-owned retailers such as Indian Oil Corp and Bharat Petroleum Corp, which are self-sufficient, HPCL relies on purchasing diesel and petrol from other companies for its local sales. To compensate for the fuel usually sourced from HPCL-Mittal Energy, which will pause operations at its 226,000 bpd Bathinda refinery for 40 days, HPCL will increase its fuel purchases from Nayara.
Nayara, which is predominantly owned by Russian entities including Rosneft, is depending on Russian crude oil after supply issues arose with Saudi Arabia and Iraq. The finance ministry is also weighing the possibility of permitting state-run UCO Bank to facilitate payments for Nayara’s domestic fuel supply transactions.
Previously, some shipping companies ceased fuel lifts for HPCL from Nayara, compelling the private refiner to utilize alternative shipping methods. Nayara is employing various modes of local fuel distribution, including road, rail, and shipping.
In a related development, Indian conglomerate Adani has prohibited the entry of vessels sanctioned by the EU, the UK, and the US at its ports. The source clarified that this decision was made independently by Adani, as India follows only United Nations sanctions and does not adhere to unilateral sanctions imposed by other nations.
(Reporting by Nidhi Verma in New Delhi; Editing by Bernadette Baum)
Published on September 17, 2025.
