Rajasthan and Madhya Pradesh saw the BJP clinch massive victories in the recent Assembly elections. These two States also have a common thread in the form of oil refineries: one State has a refinery up and running and the other is nearly four years away from commissioning one.
Rajasthan recently announced with much fanfare that it would have its first refinery with Hindustan Petroleum Corporation (HPCL) setting up a nine-million-tonne facility in Pachpadra, Barmer. This would also factor in a petrochemicals complex as part of the Rs 37,000-crore outlay where the State is a 26 per cent equity ally.
On the face of it, there is no issue having a refinery in Barmer, considering that crude can be comfortably sourced from Cairn India’s oilfields. Besides, the HPCL refinery will supply petrol and diesel through a pipeline to both Rajasthan and Uttar Pradesh.
Yet with Vasundhara Raje now back as the Chief Minister, it remains to be seen if some of the details will have to be reworked. Its location, for instance, attracted a fair bit of controversy since it was originally planned at Leelala, nearly 70 km from the present site. The villagers here were not too pleased with the last minute shift and protested even while the foundation stone was unveiled in Pachpadra by the United Progressive Alliance Chairperson, Sonia Gandhi.
Will Raje now insist that HPCL relocate the refinery to Leelala? Nobody has a clue, least of all the oil company, whose only interest is to get the project up and running by 2017. From the company’s point of view, this will help enhance its presence in the northern region, where it already has the Bhatinda refinery.
The only downside to any relocation is that it will delay the Rajasthan facility by a year. However, there is no telling either if any decision will be taken by the Raje government in a hurry even while the refinery is a priority for the State.
After all, the general elections are less than six months away and dynamics could change depending on which political party makes it to the Centre. If it is an all-BJP show, for instance, the pace of decision making will be a lot faster and the HPCL project will progress without a hitch.
Capacity issue at Bina Madhya Pradesh, where Shivraj Singh Chouhan has recorded his third successive triumph, is home to Bharat Petroleum Corporation’s (BPCL) refinery in Bina. This project has been up and running for nearly three years now and has helped BPCL grow its presence in Central India.
At one point, it was believed that the company would comfortably double the Bina refinery’s capacity from six to 12 million tonnes (mt). After all, there is no shortage of demand for products in this part of the country. Yet there are issues relating to availability of water, which could just end up being an obstacle of sorts.
Consequently, BPCL is looking at only a marginal expansion to 8.5-9 mt even though it would like to go a lot higher as in the case of its Kochi facility, where capacity is being increased to 15.5 mt from 9.5 mt. Water, or the lack of it, will put the brakes on Bina’s expansion even though there is a large market for its output of petrol and diesel. It is precisely due to this limitation that BPCL will look at Allahabad for its next phase of refinery growth post-2016.
The Madhya Pradesh government has been pulling out all stops to improve infrastructure, which is visible in the form of roads, highways and the bus rapid transit system (in Indore). Fuel supplies from Bina are as critical in the overall growth model but the problem of water will have to be addressed first. Two victorious BJP States will now have to plan their own refinery roadmaps.