Odisha Sun Times Bureau
Bhubaneswar, Oct 14:
State owned Indian Oil Corporation Ltd (IOCL) plans to commission its 15 million tonne crude oil refinery at Odisha’s Paradip by December. Prime Minister Narendra Modi will dedicate the project to the nation.
As per a press release issued after the meeting, the state government will set up a committee to lay down a roadmap for a downstream petrochemical complex and review of fiscal incentives for the 15-million tonnes oil refinery project at Paradip. The committee would also review the fiscal incentives under a fresh memorandum of understanding (MoU) to be signed for Paradip refinery project.
Besides, the meeting decided to constitute a working group of senior officials of the state government and IOCL to lay down a roadmap for the petrochemical complex and the role of IOCL as an anchor tenant for petroleum, chemicals and petrochemicals investment region, said an official release.
“The Paradip refinery is an important project for us and we are going to commission it shortly. Regarding the issue of VAT, it would be applicable on sale of products within Odisha. Concession on VAT is only a deferment and we will pay it back to the state government after a certain period,” said IOCL chairman B Ashok.
Notably, IOCL had signed a MOU with the state government in February 2004 to set up a 15 million tonne refinery along with a petrochemical complex at Paradip. The project was about to bring in a total investment of Rs 55,000 crore to the state.
The refinery is expected to produce 5.97 million tonne of diesel, 3.4 million tonne of petrol, 1.45 million tonne of kerosene/ATF (Aviation Turbine Fuel), 536,000 tonne of LPG, 124,000 tonne of naphtha and 335,000 tonne of sulphur, all of which will be for sale in the domestic market.
The refinery and the petrochemical complex will be a part of the projects in the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) hub that is expected to attract investments to the tune of Rs 2.74 lakh crore. The state government has granted exemption on VAT to the oil major for 11 years from the date of commissioning of the refinery.
Though the revenue in the form of VAT would be ploughed back to the state exchequer after 11 years, the government will be denied cash flow to the tune of Rs 50,000 crore for the period.
The state government had allowed concession to IOCL to ensure competitiveness and viability for its refinery operations. Also, the refinery project had promised employment generation and promotion of downstream units.