State-run oil firms to set up biggest refinery

Public sector oil firms IOC, BPCL, HPCL and EIL will invest Rs.1.50 lakh crore in setting up India’s biggest refinery on the west coast, Oil Minister Dharmendra Pradhan said.

Indian Oil Corp (IOC), the nation’s biggest refiner, will build a 60 million-tonne-a-year oil refinery in Maharashtra along with Bharat Petroleum Corp Ltd (BPCL), Hindustan Petroleum Corp Ltd (HPCL) and Engineers India Ltd (EIL), Mr. Pradhan said in a twitter post.

“Refinery to be built in 2 phases (40+20 million tonnes); 1st phase will have more than Rs 1 lakh crore investment (biggest in India),” he said.

IOC has been looking at west coast for a refinery as catering to customers in West and South was difficult with its refineries mostly in the North. HPCL and BPCL have also been looking at a bigger refinery because of constraints they face at their Mumbai units.

“The refinery will produce petrol, diesel, LPG, ATF and feedstock for petrochemical plants in plastic, chemical and textile industries in Maharashtra,” said Mr.Pradhan, who discussed the setting up of the refinery with Maharashtra Chief Minister Devendra Fadnavis in Mumbai yesterday.

“Government of Maharashtra and Ministry of Petroleum and Natural Gas will closely work for early identification of land for refinery and finalisation of details of project,” he added.

Fifteen million tonnes a year is the biggest refinery any public sector unit has set up in one stage. IOC recently started its 15 million tonnes unit at Paradip in Odisha.

Reliance Industries holds the distinction of building the biggest refinery in India till now. It built its first refinery at Jamnagar in Gujarat with a capacity of 27 million tonnes, which was subsequently expanded to 33 million tonnes.

It has built another unit adjacent to it for exports, with a capacity of 29 million tonnes.

The refinery being planned by the state-owned firms will be bigger than that. The phase I itself will be bigger than any one single unit. It will cost Rs. 2,500 crore per million tonnes and for the full 60 million tonnes, it will cost Rs 1.5 lakh crore. It will also be accompanied by a petrochemical complex.

Being on the west coast will provide the unit a natural advantage of easily sourcing crude oil from the Middle East and Africa, officials said. Also, moving products to consumption heartland will not be difficult.

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Petrol becomes cheaper by 32 paise, diesel by 85 paise/litre

Petrol price was today cut by 32 paise a litre and diesel’s by 85 paise a litre, the fourth reduction in rates in six weeks on the back of softening global oil prices.

Petrol in Delhi will cost Rs. 59.03 per litre with effect from midnight tonight as against Rs. 59.35 per litre currently.

A litre of diesel will cost Rs. 44.18 as opposed to Rs. 45.03 presently, said Indian Oil Corp (IOC), the nation’s biggest fuel retailer.

This the fourth reduction in rates since December 1.

Rates were on that day cut by 58 paise a litre in case of petrol and by 25 paise in diesel. This was followed by a 50 paise a litre reduction in price of petrol from December 16 and 46 paise in case of diesel.

Petrol price, on January 1, was cut by 63 paise per litre and diesel’s by Rs. 1.06 a litre.

The reduction would have been more but for government raising excise duty on the two auto fuel to take away some of the gains from the crude oil prices slumping to 12-year low of under USD 30 per barrel.

The government had on December 17 raised excise duty on petrol by 30 paise and that on diesel by Rs. 1.17 per litre.

This was followed by a 37 paise increase in the levy on petrol from January 3 and Rs. 2 per litre on diesel.

The two duty hikes took away from customers benefit of 67 paise lower petrol price and Rs. 3.17 a litre lower diesel rate but gave the government Rs. 6,800 crore in additional revenue during the remainder of current fiscal.

“The current level of international product prices of petrol and diesel and Rupee-US Dollar exchange rate warrant a decrease in prices, the impact of which is being passed on to the consumers with this price revision,” IOC said in a statement.

State-owned fuel retailers IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) revise rates of petrol and diesel on 1st and 16th of every month based on average oil price and foreign exchange rate in the preceding fortnight.

“The movement of prices in the international oil market and Rupee-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes,” the statement added.

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