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State-owned Bharat Petroleum Corporation Ltd (BPCL) is set to build India’s costliest oil refinery-cum-petrochemical complex in Andhra Pradesh at an estimated cost of Rs 95,000 crore. The proposed refinery will have a capacity of 9 million tonnes per annum (crude oil processing capacity) and produce 3 to 3.5 million tonnes of petrol and diesel and 3.8 to 4 million tonnes of feedstock of petrochemicals annually. The refinery will be built on 6,000 acres of land, which has already been identified, and is expected to be commissioned in 48 months from the final investment decision.
The project is a significant undertaking for BPCL, which is India’s third-largest oil refiner. The company’s Director (Finance) Vetsa Ramakrishna Gupta stated that the initial indication of capex requirement is around Rs 95,000 crore, but the final number will be decided by December once the detailed project report and feedstock studies are completed. BPCL is also exploring the possibility of inducting a joint venture partner.
The Andhra Pradesh government has indicated a good amount of capital subsidy incentives for the project, but the exact amount has not been disclosed. The refinery is expected to create jobs and generate revenue for the state. This project is the costliest oil refinery project in India, surpassing Hindustan Petroleum Corporation Ltd’s (HPCL) proposed refinery in Rajasthan, which is expected to cost around Rs 71,814 crore.
India is the world’s third-largest oil importing nation, with a refining capacity of 256.8 million tonnes. The country has a significant demand for oil, with domestic consumption reaching 234.3 million tonnes in the 2023-24 fiscal year. The remaining products are exported. The BPCL refinery project is expected to help meet India’s growing energy demands and reduce dependence on imports.