The government will take a decision within one month whether to set up a

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refinery in Rajasthan or not. The state government is pushing for setting up of a refinery after crude production began from the country’s largest offshore field in Barmer.

A committee headed by S C Tripathi, former petroleum secretary, is studying the feasibility of a refinery in the state. He has been assisted on the report by former heads of oil firms. “We are expecting the report to come out in two to three weeks,” said RS Sharma, chairman and MD of ONGC on Sunday at Laxmangarh, near Jaipur.

Cairn India started crude production from Barmer last year. The field is expected to provide up to 20 per cent of the country’s crude oil needs. Rajasthan government is keen to operate a refinery, which will provide the state revenue and employment opportunities.

The field in Barmer will generate Rs 5,000 crore for the Rajasthan government every year. At present, three refinery projects are underway in the country — in Bhatinda, Paradip and Bina.

In addition, the government on Sunday kick-started the Rajiv Gandhi Gramin LPG Vitrak scheme (RGGLV). The three-oil marketing firms — IOC, BPCL and HPCL — distributed LPG dealerships in 44 villages spread over six states on Sunday. The scheme has been introduced in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Rajasthan and West Bengal during it pilot launch.

Agencies under the RGGLV will be of small size requiring lesser finance and infrastructure. These agencies would be viable with monthly refill sales of 600 against 2,500 at present. Meanwhile, the issue over non-fulfillment of under-recoveries of oil firms lingers on. New LPG dealerships will add more to the under-recoveries. When asked how the government plans to compensate OMCs for the losses, petroleum minister Murli Deora said, the finance ministry is likely to release another Rs 19,000 crore towards compensating OMCs for selling LPG and kerosene below market costs.

Finance minister Pranab Mukherjee has promised to release of Rs 12,000 crore in cash. Country’s three OMCs are losing more than Rs 190 crore every day for selling fuel below market costs. While upstream firms compensate the losses on petrol and diesel, losses on cooking gas and kerosene needs to be compensated by the government.



(The correspondent’s visit was hosted by IndianOil)