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Numaligarh refinery expansion: Bad cost economics
Feb 08: The cost economics of Numaligarh Refinery's massive Rs 22,594 crore expansion is pivoted on capital subsidy and excise duty relief
8What is the point of supplying petrol and diesel to Bangladesh from a refinery that is subsidized by the Indian government? A pipeline will ferry crude all the way to Numaligarh and a parallel pipeline will transport back the finished product, some of it going to Bangaldesh.
8Even as the BPCL supported refinery struggles with the expansion, there is talk of a petrochemical complex. Clearly, a standalone refinery, far from crude sources and markets for finished products, cannot stand on its own, without a petrochemical complex, but then who is going to fund it? The point to note is that the neigbouring Assam Gas Cracker is struggling to break even in the midst of massive doses of capital and fuel subsidy support.
8The refinery expansion is one project that the BJP government sanctioned in a hurry. BPCL will have much to rue, at a later point in time.
8Nevertheless, the company is now pushing ahead with the project, find out when are contracts likely to come out
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