NEW DELHI – The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved a significant cost revision for the HPCL Rajasthan Refinery Limited (HRRL) project. The total project estimate has nearly doubled, jumping from ₹43,129 crore to ₹79,459 crore.
Strategic Funding and Investment
To support the revised budget, the government has sanctioned an additional equity investment of ₹8,962 crore by Hindustan Petroleum Corporation Limited (HPCL).
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Equity Stake: Following this move, HPCL’s total equity contribution will stand at ₹19,600 crore.
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Ownership: HRRL is a joint venture between HPCL (74%) and the Government of Rajasthan (26%).
Operational Milestones & Capacity
Located in the Balotra district of Rajasthan (Pachpadra), the facility is designed as a 9 MMTPA greenfield refinery-cum-petrochemical complex.
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Scheduled Launch: Commercial operations are officially set to begin on July 1, 2026.
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High Complexity: The refinery features a heavy petrochemical focus (over 26% of its output), producing critical industrial materials like Polypropylene, HDPE, LLDPE, Benzene, and Butadiene.
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Regional Impact: The project currently employs approximately 25,000 workers and is expected to transform the local economy of Western Rajasthan.
Why the Revision?
The sharp escalation in costs is attributed to several factors:
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Rising Input Costs: Significant increases in raw materials, equipment, and labor since the project’s inception.
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Value Addition: The integration of advanced petrochemical units to reduce India’s import dependence.
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Energy Independence: The refinery will process locally produced Mangala crude, optimizing regional resources and saving foreign exchange.
This approval aligns with India’s broader strategy to position itself as a global refining hub while strengthening the domestic supply chain for the 2026-27 fiscal year.
