New Delhi: India must not only expand its strategic petroleum reserves but also build dedicated storage for chemicals and catalysts-critical to refinery operations-to shield against geopolitical shocks, said Prasad Panicker, chairman of sanctioned refiner Nayara Energy, which is grappling with supply disruptions after EU curbs.
Rosneft-backed Nayara Energy is facing challenges in importing non-Russian crude and in exporting refined products, affecting its runs. It is also reportedly dealing with shortages of chemicals and catalysts as sanctions have blocked supplies from key European vendors.
“There is a gap. I fully agree, we need to have more strategic reserves,” Panicker told an industry conference on Tuesday. “When I’m talking about strategic reserve, it should not be for crude alone. There are essential chemicals, catalysts, etc., which also need to be adequate so that operations are not impacted.”
Panicker did not refer to Nayara Energy in his comments at the conference.
Expanding refining capacity alone will not make the country resilient, he said, adding, “On a long term, we have to create an ecosystem that all technologies, services and chemical catalysts and other materials are indigenously available. It is a sad factor that even though we have 270 million tonnes of refining capacity, we still have to buy many chemicals and catalysts from abroad.”
The world is facing “maximum disturbance” today due to geopolitical shocks, and that is going to persist for another 15 years, he said.
Since India depends on imports for 87% of its crude and half of its gas needs, global supply chains remain critical, Panicker said. “Some of the choke points are a real concern,” he added, citing how a brief Suez Canal blockage in 2021 sent ripples through the global supply chain.
Separately, a government official said Nayara Energy’s fuel supplies to domestic retailers will remain unaffected despite the refiner’s difficulties in securing ships for coastal transport.
Nayara Energy operates a 20 million tonnes refinery in Gujarat and operates 6,600 retail outlets across the country. It also supplies fuels to state-run Hindustan Petroleum Corporation for retailing.
