Narendra Modi launched $6.8 billion refinery in Rajasthan

Vastavam web: Indian Prime Minister Narendra Modi on Tuesday launched the construction of a $6.8 billion refinery in the western state of Rajasthan, hopeful to lift national capacity to meet the surge in fuel demand.By 2030, India’s demand for petrol and diesel is expected to go up by two-thirds to 170 billion litres, as an expanding middle class spends on cars and air travel.

The foundation stone for the project was first laid in September 2013 by the then ruling Congress Party chief Sonia Gandhi. However, the project remained a non-starter as the state government had not given adequate incentives.The project is now estimated to be completed by 2022-23, Oil Minister Dharmendra Pradhan said.To make the project viable, the state government has offered an interest-free loan of 168.45 billion rupees ($2.63 billion) to HPCL to be paid back in 15 years from the commissioning of the project, Pradhan added.Energy analysts are, however, skeptical about the project’s profitability in a land-locked desert state.Pradhan said the Rajasthan refinery will buy about 50,000 bpd oil from the nearby oilfield operated by Cairn India Ltd, a unit of Vedanta Resources.However, a senior HPCL executive said his company prefers to fully operate the refinery on Vedanta’s oil to cut transportation costs.