IOC seeks 100% excise sop to kickstart LPG Project in NE
Kolkata   10-Dec-2011

Indmax, IndianOil (IOC)’s ambitious project in Bongaigaon Refinery, has been hanging fire after the Centre slashed excise duty benefits for refineries in June. The Rs 1800-crore project was expected to bring down LPG deficit in the North East, significantly. The region has an annual deficit of 75,000 tonnes of LPG. This will increase to 3,75,000 tonnes by 2050. The duty restructuring, coupled with increase in entry tax by the Assam government, is likely to cost the four refineries of North East around Rs 1900 crore, annually.

A Saran, Executive Director, Bongaigaon Refinery, who was in Guwahati to attend a seminar on “Hydrocarbon Industry Growth, Prospects and Challenges,” said: “This project will produce 2 lakh tonnes of LPG annually and significantly reduce the LPG deficit.” Despite local production of LPG, the North East imports the fuel through Haldia port. Saran added: “It will take four years to complete the project. However, it is under review as there has been a cut in fiscal incentive. We have requested the government to grant 100% excise benefit.”

The four refineries have taken up the issue with Northeast MPs Forum. Assam Chief Minister Tarun Gogoi has taken up the issue with Prime Minister Manmohan Singh and Finance Minister Pranab Mukerjee.

Bongaigaon refinery has completed a diesel hydro treatment plant and motor spirit quality upgrade. The refinery is now producing Euro-IV grade diesel and is also capable of Euro-V diesel if there is enough demand. Both these projects were built through indigenous technology which in turn reduced costs by at least 5 times. The installed capacity of four refineries of the region is 7 mmtpa, while locally crude availability is 4.9 mmtpa. Bongaigaon imports 1.5 mmtpa Rava crude.