Project cost of Rajasthan’s Barmer Refinery increased by 68% in 5 years!

Rajasthan Barmer Refinery: The work on preparing the refinery plant of state-owned oil company Hindustan Petroleum Corporation Limited (HPCL) at Pachpadra in Barmer district of Rajasthan is going on at a rapid pace. The central government has set a target of inaugurating the refinery project in January 2024 by Prime Minister Narendra Modi. But after the Old Pension Scheme (OPS), a fierce tussle has started between the Center and the Congress government of Rajasthan regarding this project. The project cost which was estimated regarding the refinery has increased by about 70 percent.

What is the history of Barmer Refinery

When the production of crude oil started in Barmer, Rajasthan, it was decided that a refinery plant would be set up here. The ownership of this refinery is with HPCL Rajasthan Refinery Limited (HPCL Rajasthan Refinery Limited), which is a joint venture of Hindustan Petroleum Corporation Limited and the Government of Rajasthan. HPCL has 74 percent stake in the project, while the Rajasthan government has 26 percent stake. For the first time, the foundation stone of this refinery was laid on 22 September 2013 by the then Congress President and UPA Chairperson Sonia Gandhi. However, after this, the project got stuck in the balance after the Congress government in the state and the center went out of power. but the prime minister Narendra Modi Work on the project began after its inauguration on 16 January 2018. When work on the petrochemicals complex with 9 million tonnes of refining capacity and 2 million tonnes per annum capacity began, the cost of the project was estimated at Rs 43,000 crore.

Project cost increased by 68 percent

But the surprising thing is that the cost of the refinery project which was estimated at Rs 43,129 crore in 2018 has increased to Rs 29,129 crore or 68 per cent to Rs 72,000 crore in five years. Petroleum Minister Hardeep Puri says that the project cost has increased due to increase in cost. He said that when work on the project stopped during the Corona epidemic, there has been a jump of 45 percent in steel prices between 2017 and 2022, due to which the cost has increased. The central government is blaming the state government for the increase in cost, while the state government is blaming the central government.

Tension between center and state

There has been an increase in the cost of Barmer Refinery, so the Central Government is demanding Rs 2500 crore from the Rajasthan Government to compensate it. The Petroleum Minister says that he has two options. Either the state government retains its 26 per cent stake in the project by paying Rs 2,500. Or else HPCL will increase its stake to 84 per cent by paying Rs 2500 crore. A target was set to raise 66 per cent of the funds for the project from the SBI-led commercial. At present, more than 50 percent work of the refinery has been completed. The government says that after the completion of the refinery, there will be a reduction of Rs 26,000 crore in India’s import bill. On the other hand, Rajasthan will be benefited tremendously after the completion of this project. There will be direct and indirect employment opportunities.

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