During the Budget presentation on July 23, the formal announcement of the refinery is anticipated.
In Budget 2024, following a recent Modi-Naidu meeting, the central government has reportedly agreed to a major demand to establish a Rs 60,000 crore oil refinery and petrochemical hub in Andhra Pradesh. Discussions included exploring feasibility with Bharat Petroleum Corporation Limited (BPCL), with Srikakulam, Machilipatnam, and Ramayapatnam being considered as potential locations.
The refinery’s formal announcement is anticipated during the July 23 Budget presentation. Yet, selecting a location, which symbolizes distinct geographical segments (north, central, and south), may extend beyond the Budget, according to an anonymous source cited.
Strategic Alignment and Political Support
The decision to establish the refinery is rooted in the Andhra Pradesh Reorganisation Act, 2014, which requires extensive measures for the sustainable development of successor states within a specified period. Section 93 of the Act highlights provisions in the Thirteenth Schedule, emphasizing the creation of a new crude oil refinery and petrochemical complex in Andhra Pradesh by entities like IOC or HPCL.
BPCL and the Ministry of Petroleum have chosen not to comment officially, but Chief Minister Naidu used social media platform X to emphasize the state’s strategic advantage on the eastern coast for industrial projects. “Today, I met with Bharat Petroleum officials to discuss establishing an oil refinery and petrochemical complex in Andhra Pradesh, with anticipated investments totaling Rs 60,000-70,000 crore,” he stated. He urged for a detailed feasibility report within 90 days and highlighted the state government’s commitment to facilitating approximately 5,000 acres of land smoothly.
Impact on Economic Development
According to insiders, three sites—Srikakulam, Machilipatnam, and Ramayapatnam—were under consideration for the refinery. The formal announcement is expected during the budget presentation on July 23. The locations will undergo evaluation before a final decision is made. Sources suggest this assessment will span at least two months, with the possibility that the location won’t be disclosed in the budget announcement.
An anonymous source informed ET, “The announcement is politically delicate as the three locations span different parts of the state – north, central, and south.” An email sent to BPCL remained unanswered at press time.
This marks a significant achievement for Naidu, who advocated for the refinery during discussions with the PM and Petroleum Minister Hardeep Puri.
Naidu’s 16 MPs provide crucial support to the BJP-led NDA government. Despite this, he consistently emphasizes that he prioritizes the interests of his state and avoids unsettling the status quo over any demands.
The refinery commitment was made during the state’s bifurcation and is outlined in the Andhra Pradesh Reorganisation Act 2014. Section 93 mandates that the Centre “shall take necessary actions as listed in the Thirteenth Schedule for the development and sustainable growth of the successor states within 10 years from the appointed day.” The fourth point under the “infrastructure” section of the Thirteenth Schedule specifies that “IOC or HPCL shall, within six months from the appointed day, assess the feasibility of establishing a new crude oil refinery and petrochemical complex in the successor state of Andhra Pradesh and make a prompt decision accordingly.”
While BPCL and the Petroleum Ministry have remained silent on the matter, Naidu used microblogging platform X to state, “Situated strategically on the eastern coast, our state holds significant potential in petrochemicals. Today, I met with Bharat Petroleum Corporation Limited’s Chairman and Managing Director, Mr. Krishna Kumar, to discuss establishing an oil refinery and petrochemical complex in Andhra Pradesh, involving an investment of Rs 60,000-70,000 crore. I have requested a comprehensive plan and feasibility report within 90 days. The project will require approximately 5,000 acres of land, which the government is committed to facilitating smoothly.”
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