Rosneft’ Nayara Energy plans expansion of retail fuel outlets, CNG business

Currently, the refining and oil-marketing company has a network of 6,500 outlets across Gujarat, Rajasthan, Maharashtra, Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Odisha and Telangana.

"So we are at 6,500 retail outlets right now. You can look at our past performance and try to do your algorithms and numbers. We are usually shy about making claims and then trying to chase those numbers. But yes, our past performance, if it is a barometer, you would see us growing and definitely taking a fair share of the market. The market is looking extremely strong, so you can expect us to definitely participate and take a fair share from that market," he said.

In August 2017, Ruias-owned Essar Group sold Essar Oil, its refining and fuel retailing business, to Russian oil giant Rosneft and an investment consortium led by global commodity trading firm Trafigura and UCP Investment Group for ₹86,000 crore. Essar Oil was rebranded as Nayara Energy following its takeover.

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Expansion spree

Taneja said that the company would look at expansion through addition of new retail outlets and also boost its business through existing customers with improved services with the use of technology and the evolution of new business models like 'deliver to home'.

"We are going to pivot our business on two levers. One is, of course, continue expanding the network so that we make this particular product more accessible, because convenience and accessibility are going to be the mainstay. So, we are going to be doing that. Having said that, it is not only rural. It's (retail network) also going to grow in India with new highways as they come along because of a lot of investment in infrastructure. The second pivot is going to be around the existing customers. We do see millions of transactions happening, upwards of 150 million transactions every month (at Nayara fuel outlets). And those transactions are important for us. These transactions will grow. And for us, it's going to be how we are going to use the technology to bring in that delight with the customer," he said.

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On when the company wants to come up with new business models including home delivery of fuels, he said that developments are expected going ahead on this front. He also noted that the company is carrying out pilots for several services including those for vehicles and tyres, lubricants, food and conveniences for its customers and added that they are largely in the exploratory phase currently.

Regarding the expansion of its CNG business, Taneja said that the business is still small and CNG is sold at just a few outlets along with petrol and diesel. The company would explore if it could co-locate CNG and petrol refilling stations.

"There would be alternative energy, battery charging, etc, which will come in, some part of CNG will keep coming in..There is going to be definitely some more development. While right now, the percentage contribution of other revenue streams (like CNG, battery) is not even 0.1% for the industry, I think that this is a market which we should closely look at. This (alternative energy) will grow. So we'll explore...Our experience has been that if you co-locate CNG and petrol, then there is a conflict in customer profile, and one rubs off adversely on the other...," Taneja said.

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On Nayara Energy's plans to set up two new ethanol plants in the country, he said that that the company has already purchased two parcels of land in Madhya Pradesh and Andhra Pradesh. Nayara has already announced to set up the plants with a cumulative investment of ₹600 crore. This is in line with the government's plans to achieve 25% ethanol blending in petrol by 2025. He also said that although sustainable aviation fuel is still being considered and evaluated for production by the company, it is part of its larger environmental, social and governance (ESG) strategy.