Union Govt relocates major refinery projects from Maharashtra to Gujarat & Andhra Pradesh

NEW DELHI : The Indian government is shifting plans for two large-scale oil refineries, each with an annual capacity of 10-15 million tonnes and integrated petrochemical units, from Maharashtra’s Ratnagiri district to Gujarat and Andhra Pradesh. This decision aligns with ongoing efforts to bolster bilateral energy ties with Saudi Arabia.

This move follows progress in talks with Saudi authorities to strengthen bilateral energy ties. While Oil and Natural Gas Corporation (ONGC) may partner with Saudi Aramco for the Gujarat refinery, Bharat Petroleum Corporation Ltd (BPCL) is expected to spearhead the project in Andhra Pradesh. The refineries present a strategic opportunity for Saudi Arabia to secure crude sales to India, as its share in India’s crude oil imports has declined over the years.

High-level talks and $100 billion promise

 The discussions are expected to gain further momentum ahead of Prime Minister Shri Narendra Modi’s meeting with Saudi leadership next month. The meeting seeks to revisit Saudi Arabia’s earlier commitment to invest $100 billion in India, which has seen sluggish progress despite the identification of key sectors like railways, ports, and waterways for Saudi involvement. 

Why Ratnagiri was sidetracked

The Ratnagiri refinery project has faced significant hurdles, including resistance from locals over land acquisition. Additionally, industry experts voiced concerns over the feasibility of a 60-million-tonne mega refinery initially planned in collaboration with Indian Oil, HPCL, and BPCL, alongside partners Saudi Aramco and Abu Dhabi National Oil Company (Adnoc).

With delays plaguing Ratnagiri, Gujarat and Andhra Pradesh have emerged as more viable alternatives. Gujarat, already home to major refineries in Jamnagar (Reliance and Nyara Energy) and Vadodara (Indian Oil), is likely to gain another large facility. Andhra Pradesh, too, has been pushing for a refinery since the state’s bifurcation in 2014, with the N Chandrababu Naidu-led government urging the Centre to deliver on its promise. 

Political implications of relocations

 Maharashtra has seen several high-profile industrial projects being relocated to Gujarat, igniting political debates over the state’s economic prospects.