Nayara Energy, India's biggest private fuel retailer, plans to expand its network of petrol pumps by one-fourth to 7,300 in the next 1-2 years before hitting a pause button to assess demand, its Chief Executive Officer B Anand said on Wednesday.
Speaking at the India Energy Forum of CERAWeek, he said the company, which owns and operates an oil refinery with a capacity of 20 million tonnes a year at Vadinar in Gujarat, is looking at venturing into petrochemicals to buffer margins.
Russian oil giant Rosneft-backed firm has about 5,800 petrol pumps across the country now, which it plans to expand to 7,300 in a year or two before "taking a pause and look at how the Indian consumer story grows", he said.
Rosneft and its partners in August 2017 bought Essar Oil for USD 12.9 billion and later renamed the company Nayara Energy.
Nayara uses a franchisee-owned franchisee-operated model, whereby the franchisee leases land to the company for a period of 30 years and, thereafter, invests in setting up the infrastructure for the outlet.
Nayara is the largest private fuel retailer in the country. State-owned firms control a bulk of about 71,000 petrol pumps in the country. A joint venture of Reliance Industries and BP plc trails Nayara with around 1,406 fuel retail outlets followed by Shell.
He said Nayara is investing USD 750-800 million for a foray into the petrochemical business.
In the first phase, the company plans to set up a 4,50,000-tonnes-per-annum polypropylene plant.
Polypropylene is used in applications, including packaging for consumer products, plastic parts for various industries, including the automotive industry and textiles.
The unit, he said, would get started soon.
Also, the firm is looking at venturing into specialty chemicals, he said.
"We are in the stage of chalking strategies," he said adding that the Vadinar refinery has a land bank of 2,400 hectares that sits next to the coast where 70 per cent of India's crude oil is imported.
Petrochemicals is "no longer just margin booster. I see more as margin buffer and see substantial integration between refinery and petrochemical operations", he said.
Rosneft owns 49.13 per cent of the company, while global commodity trading and logistics giant, Trafigura and Russia's UCP Investment Group together own another 49.13 per cent.
Anand did not talk about the expansion of refinery capacity.
The firm under the previous management of the Ruia family had in 2013 announced plans to double the capacity to 40 million tonnes at an investment of Rs 30,000 crore.