14 years on, Paradip refinery to be inaugurated.

Former prime minister Atal Bihari Vajpayee laid the foundation stone of the project in May 2002 and the current Prime Minister, Narendra Modi, will inaugurate it on February 7. The 15-million-tonne Paradip refinery of Indian Oil Corporation (IOCL), the largest in the eastern coast, has gone through lots of ups and downs to get to this stage. But, as it nears its commissioning date, IOCL is upbeat that the project equipped with superior technology to process high-sulphur crude oil, which can be sourced cheap, will bring windfall in terms of higher refining margins.

The refinery has been built at a cost of Rs. 34,555 crore.

The refining margin will be higher by $6-7 a barrel over the average refining margin $10-12 earned by IOC at present. This is expected to boost the bottom line of IOC as it would improve the overall gross refining margin (GRM) of the company by $2-3 a barrel, said Ramjee Ram, executive director (in-charge) of the refinery project at Paradip.

Though the refinery can process all types of crude oil sourced from the Gulf nations, Africa and South America, it has no control on the supply of the feed as the crude is procured by the central procurement cell of IOC at Delhi, which decides the mix of crude to be sent to different refineries operated by the company. The refinery is equipped to produce low-emission BS-IV-compliant motor fuel, which puts it in an advantageous position as the country goes for stricter regulations on pollution front. “We can even step it up to produce BS-VI-compliant automobile fuel with the addition of few equipment. A study is on in this regard to ascertain the market and investment required for this purpose,” said Ram.

The government, with an objective to check automobile pollution, has set deadlines for switching over to BS-IV emission norms by April 2016 and BS-VI emission norms by 2020.

BS