The logo of Bharat Petroleum oil and fuel company is seen at its fuel station in Kolkata, India, August 2, 2024
The government order stated that 6,000 acres of land have been allocated for the refinery and petrochemical complex, which will require an estimated investment of 968.62 billion rupees. The project is scheduled to begin commercial operations by January 2029. The facility is expected to enhance India’s refining capacity and support the growing domestic demand for petroleum products and petrochemicals.
Andhra Pradesh’s government, led by Chief Minister Chandrababu Naidu, a key political ally of Prime Minister Narendra Modi, aims to attract major investments to strengthen the state’s fiscal position. The region has been seeking large-scale industrial projects to help offset the financial burden caused by debt and social welfare spending.
As part of the agreement, the state will provide financial incentives to BPCL over a 20-year period, equivalent to 75% of the project’s estimated capital expenditure. These incentives are designed to support the refinery’s long-term viability and promote industrial development in the region. The project is expected to create employment opportunities during construction and operation while also stimulating growth in associated industries such as logistics, chemicals, and engineering services.
BPCL is India’s second-largest state-owned refiner, operating three refineries with a combined crude processing capacity of 706,000 barrels per day. The company plays a significant role in India’s energy supply chain, producing fuels and petrochemical products for domestic consumption and export.
The new refinery in Andhra Pradesh will help BPCL expand its refining footprint beyond its existing facilities in Mumbai, Kochi, and Bina. It will also contribute to India’s broader strategy of increasing energy self-sufficiency by boosting domestic refining capacity and reducing reliance on imported refined products.
The project aligns with the central government’s objective of enhancing downstream infrastructure to support economic growth and meet the rising energy needs of industrial and transportation sectors. Once operational, the refinery is expected to become a major hub for petroleum processing and petrochemical production in southern India.
In addition to energy production, the project is anticipated to attract related investments in storage, port logistics, and supporting infrastructure, further boosting Andhra Pradesh’s industrial landscape. The initiative marks one of BPCL’s largest capital commitments to date and reflects its long-term plan to strengthen refining and petrochemical integration as part of India’s evolving energy development strategy.
