New Delhi, April 8 The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a significant increase in the cost of the Rajasthan oil refinery project to Rs 79,459 crore, along with additional equity support from Hindustan Petroleum Corporation Ltd (HPCL), as the government pushes to expand domestic refining and petrochemical capacity.
The revised project cost of HPCL Rajasthan Refinery Ltd (HRRL) represents a significant jump from the earlier estimate of Rs 43,129 crore, according to an official statement.
HPCL will invest an additional Rs 8,962 crore, taking its total equity contribution to about Rs 19,600 crore in the project.
"The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the revision of the HRRL project cost," it said.
The refinery-cum-petrochemical complex, located in Rajasthan's Balotra district, is designed as a 9 million tonnes per annum facility with a strong focus on petrochemicals, reflecting India's strategy to boost value-added output and reduce import dependence.
Prime Minister Modi will inaugurate the refinery on April 21. The project is scheduled to begin commercial operations from July 1, 2026.
Once operational, the complex will produce fuels, including petrol and diesel, along with petrochemicals such as polypropylene, polyethylene variants, and key industrial chemicals like benzene and butadiene.
These products are widely used across sectors ranging from transportation and packaging to pharmaceuticals and construction.
The project is expected to play a key role in improving India's energy security by processing domestically produced crude, including supplies from the Mangala fields in Rajasthan, while also helping to reduce reliance on imported petrochemicals.
It also aligns with New Delhi's broader push to position the country as a regional refining and manufacturing hub.
HRRL is a joint venture between HPCL, which holds a 74 per cent stake, and the Government of Rajasthan with the remaining 26 per cent.
The development has already generated significant employment during construction, with about 25,000 workers engaged across various project activities.
The cost escalation reflects rising input prices and the addition of complex petrochemical units, underscoring the capital-intensive nature of next-generation refining projects as India seeks to meet growing energy and materials demand.