Indian Oil Corporation (IOCL) has received board approval to proceed with the expansion of its Barauni Refinery in Bihar, increasing the crude processing capacity from 6.0 million tonne per annum (MTPA) to 9.0 MTPA. Initially sanctioned at an estimated cost of Rs 13,779 crore, the project’s revised budget now stands at Rs 16,724 crore.

The increase of nearly Rs 2,945 crore is primarily attributed to a rise in the cost of Plant & Machinery. The expansion aligns with the company’s long-term strategic goal of enhancing refining capacities to meet India’s growing energy demands.

The revision in project cost is essential to account for inflationary trends in equipment and materials, particularly in the procurement of lant & machinery which forms a significant portion of capital expenditure in such large-scale industrial undertakings. This capacity enhancement is expected to improve operational efficiency and product availability, enabling the refinery to cater to a broader market while aligning with future fuel quality and emission standards.

Moreover, the expanded capacity will contribute to the socio-economic development of the region by creating direct and indirect employment opportunities and improving the industrial ecosystem in Bihar.