Whalesbook
Refinery Costs Surge Past ₹73,000 Crore
The Cabinet Committee on Economic Affairs (CCEA) approved a significant cost hike for the HPCL Rajasthan Refinery Limited (HRRL) project, raising the total estimated expenditure to over ₹73,000 crore. This revised figure is a 69% jump from the ₹43,129 crore estimate approved in 2013. The refinery's commercial operation, originally planned for December 2022, is now targeted for July 1, 2026.
Funding Boost and Reasons for Delay
Hindustan Petroleum Corporation Limited (HPCL) will invest an additional ₹9,000 crore in equity, bringing its total stake to ₹19,600 crore. Officials cited disruptions from the global pandemic and rising raw material prices as key reasons for the delays and cost increases. The project, initially conceived in 2008, has encountered several setbacks.
Refinery's Role in Energy and Petrochemicals
The HRRL project is a complex refinery with significant petrochemical capacity. It is set to produce 1 million metric tons per annum (MMTPA) of petrol, 4 MMTPA of diesel, 1 MMTPA of polypropylene, 0.5 MMTPA each of low-density polyethylene (LLPDE) and high-density polyethylene (HDPE), and about 0.4 MMTPA of benzene, toluene, and butadiene. These products are essential for industries like transportation, pharmaceuticals, packaging, and paints. The refinery aims to boost India's energy independence, cut petrochemical imports, and is projected to generate approximately ₹21,000 crore annually for central and state governments.
Related CCEA Approvals
During the same meeting, the CCEA also approved other projects. These include the second phase of the Jaipur Metro (₹13,000 crore for a 41 km corridor) and two hydropower projects in Arunachal Pradesh: the 1200 MW Kalai-II project (₹14,105.83 crore) and the Kamala project (over ₹26,000 crore).