India Allows Nayara to Use Foreign Ships for Domestic Fuel Supply Amid EU Sanctions
Indian authorities have approved four foreign-flagged ships to transport Nayara Energy’s fuels, such as petrol and diesel, within the country. This move comes as a relief after domestic supplies were disrupted when EU sanctions on Nayara led shipowners and insurers to withdraw support.
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Overseas trade still blocked
Despite resolving domestic supply issues, Nayara’s overseas trade remains stalled. Banks are refusing to process payments for exports and crude imports from non-Russian suppliers. Since August, Nayara has relied solely on Russian crude delivered in ships arranged by Russian firms.
Refinery operations under strain
Nayara’s Vadinar Refinery in Gujarat, which produces about 8% of India’s total fuel consumption, has had to scale down operations due to limited crude sourcing options. The refinery, not connected to pipelines, depends heavily on ships to supply HPCL and other markets across Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, and Odisha.
Banking bottleneck
Efforts to establish a payment mechanism through UCO Bank hit a roadblock after its UAE partner, Mashreq Bank, declined to process Nayara-linked dollar transactions. This has left crude procurement outside Russia virtually impossible. Local transactions, however, continue smoothly in rupees.
Sanctions fallout
The EU’s July sanctions targeted the Vadinar refinery, where Rosneft owns 49.13%, as part of its 18th package against Russia. These restrictions forced Nayara’s European executives, including its CEO, to resign and led to supply chain disruptions. Nayara and Rosneft have both denounced the sanctions as harmful to India’s energy security.
Festival demand relief
Officials confirmed that two ships are already moving products for Nayara, a third has joined, and a fourth will soon be operational. This arrangement is expected to stabilize domestic fuel supplies during the upcoming festival season.
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