The integrated crude and vacuum distillation unit with a capacity 6.0 MMTPA is a replacement of the old crude and vacuum units of the refinery and costs Rs 1,419 crore.

 

“Keeping in view the increasing demand for petroleum and petro-products in the coming 25 years, the government has decided to set up a new refinery project with a capacity of 550 million metric tonnes by April 2017 at the west coast of Maharashtra. The proposed petrochem complex will be a global oil and petrochem hub. The refinery will be helpful in industrial development as well as employment generation,” Pradhan said. 

 

“It is in the interest of the state, which does not have a single large refinery on its long coastline, to house the largest refinery and petrochem complex”, he added.

 

At present, the largest oil refineries in the public sector are being run by Indian Oil Corporation in Panipat and Paradip in Odisha with an installed capacity of 15 MTPA each. The world’s largest refinery complex on a single location is run by Reliance Industries in Jamnagar with one plant having a capacity of 30 MTPA while another with a capacity of 28 MTPA. Essar Oil too operates a 20 MTPA refinery in Vadinar in Gujarat.

 

The new unit would help in dismantling the old CDU units set in 1955 thereby creating space for refinery modernisation and profitability. It will also have higher distillate yield of 3%.

 

International Energy Agency's (IEA) recently projected domestic oil demand to rise to 550 MTPA by 2040 from the current 165 MTPA. In lieu of this, Pradhan asked state-run oil companies to think big along these projection lines.

 

Responding to a query on why the government is not allowing oil marketers to align retail price of petrol and diesel according to crude prices, Pradhan said the average crude price for oil products being sold is USD 50-55 a barrel and not USD 34-35 a barrel which is the current international price. "State-run oil companies are making heavy inventory losses as their average crude price is much higher than the present market price. They have lost over Rs 10,000 crore worth of inventory alone this year. So how can you accuse them of not reducing the retail prices?" he says.

 

“Almost 50% of the retail price of petrol and 42% of the retail price of diesel is constituted of taxes which are state levies. The centre can't do much as state levies are much higher than the central levies” he added.

 

Chief minister Devendra Fadnavis, who was present during the announcement, said that his government would ensure in providing large swathe of fertile agrarian land with green clearances for hassle free implementation. “We would not disappoint you in realising your grand vision for the state," he said.