Cabinet okays ₹8,962 crore additional HPCL equity in Rajasthan refinery project; cost jumps to ₹79,459 crore

The Cabinet Committee on Economic Affairs on Wednesday approved a steep revision in the cost of the HPCL Rajasthan Refinery Ltd (HRRL) project at Pachpadra in Rajasthan to ₹79,459 crore, along with additional equity infusion by Hindustan Petroleum Corporation Ltd.

The project cost has been revised from ₹43,129 crore to ₹79,459 crore, Union Minister Ashwini Vaishnaw said at a Cabinet briefing.

The Cabinet also approved an additional equity investment of ₹8,962 crore by HPCL, taking its total equity contribution in the project to ₹19,600 crore.

HRRL is a joint venture between HPCL and the Rajasthan government, with equity stakes of 74% and 26%, respectively.

The greenfield refinery-cum-petrochemical complex, with a capacity of 9 million metric tonnes per annum (MMTPA), is being set up at Pachpadra in Balotra district. It will have a petrochemical production capacity of 2.4 MMTPA.

The refinery is designed as a highly complex facility with over 26% petrochemical intensity.

It will produce 1 MMTPA of petrol and 4 MMTPA of diesel, along with petrochemical products including 1 MMTPA of polypropylene, 0.5 MMTPA each of linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE), and about 0.4 MMTPA of benzene, toluene and butadiene.

“All these products are critical to our energy and industrial ecosystem in sectors like transportation, pharma, paints, packaging industries etc.,” an official statement said.

The project is expected to enhance India’s energy security and reduce import dependence in the petrochemical sector, leading to savings in foreign exchange.

The refinery is scheduled to commence commercial operations from July 1, 2026.

The government said the project will also aid industrialisation in the region, utilise locally available Mangala crude and support India’s ambitions of becoming a refining hub.

During the construction phase, the project has generated employment for around 25,000 workers engaged by various stakeholders, the statement added.