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Press Release [FREE Access]
Petro Intelligence » Popular Angst: From Nadigram To Ratnagiri

by R. Sasankan

Mamata BanerjeeNandigram in West Bengal, Niyamgiri hills in Orissa, Pen and Jaitapur in Maharashtra’s Raigad district, Thoothukuddi in Tamil Nadu, and Plachimada in Kerala: the list of flashpoints for peoples’ uprising against big and small industrial projects in India has been growing rapidly over the past decade. Many of these popular movements started as spontaneous resistance to job-creating projects that threatened to displace indigent communities from their homes and sometimes turned violent. The cauldron of popular rage boiled over in Nandigram in 2007 when the Left Front-led West Bengal government attempted to expropriate 10,000 hectares of land to carve out a special economic zone for a chemical hub with the confrontation between the security forces and the locals leading to the death of 14 villagers.

The spectre of Nandigram has forever clouded poorly conceived plans to acquire land by force to house game-changing industrial projects. That agitation played a very crucial role in wrecking the political fortunes of the Communist party of India- Marxist (CPI-M) which had ruled the state uninterruptedly for 34 years. The CPI-M was ousted at the polls by a newly-formed party led by Mamata Banerjee who was quick to support the Nandigram agitation and plug into the popular resentment against authoritarian land grab attempts.

Davendra FadnavisThe lessons of Nandigram have not been learnt and Ratnagiri, in the ecologically sensitive Konkan region of Maharashtra, may well be the next flashpoint. The Narendra Modi government has drawn up an ambitious plan to set up a 60 million ton per annum mega refinery at Ratnagiri where it is actively trying to persuade the Saudis to invest. The Modi government is desperate to show that it can drum up foreign investment in a big ticket project as it strives to make good on a promise made in the run up to the general elections in 2014 to create 10 million jobs.

That is what makes the proposed mega refinery in Ratnagiri a showpiece project for the Modi government. The only problem is that it has already run into a wall of popular resentment against land acquisition from farmers in the region. Neither the government nor industrialists can force the hapless masses to breathe polluted air. They may not be educated enough to comprehend the dangers of each chemical component spewed out of a refinery. But they do know the horrific risks they run.

The industrially advanced West has been getting rid of their refineries as the governments in those countries are committed to improve the quality of ambient air. About 20 years ago, Mobil dismantled its refinery in Germany which was purchased by the Nagarjuna group to set up a refinery at Tuticorin in the state of Tamil Nadu. The state of Gujarat has practically become a refinery hub. The popular perception all along has been that Indians, more particularly the rural masses, won’t be too bothered about the quality of air as they grapple with the misery of poverty.

Buddhadev BhattacharyaRatnagiri has changed this perception. The people of the ecologically sensitive region simply do not want the refinery there. They do not want to part with their land – a throwback to the Nandigram syndrome -- and they do not want the area to be polluted by a refinery either. This rising consciousness about the dangers of pollution is good for the country and the people but the political parties, which see job creation at any cost as a desirable short-term goal to secure their own survival, do not seem to respect that sentiment.

The refinery project is considered highly prestigious for the country. Saudi Aramco, the largest oil company in the world, has agreed to pick up a 50 per cent equity in the project in which all the three state-owned oil marketing companies such as IOC, BPCL and HPCL are partners. This is the first time that Saudi Arabia is making a significant investment in India. Prime Minister Narendra Modi and petroleum minister Dharmendra Pradhan can legitimately claim credit for pulling off a coup.

At one level, the Ratnagiri project has the potential to boost the fortunes of the party at the polls next year. Maharashtra is a politically sensitive state where the BJP does not enjoy a majority. The BJP-led government crucially depends on the support of the Shiv Sena, an increasingly disenchanted ally. The trouble is that the Shiv Sena is backing the popular agitation against the refinery project. There is no evidence to suggest that the local opposition to the project has been instigated by outside forces. Local politicians have already jumped into the fray as they stand to benefit politically. The upshot of this is that the land acquisition move has been stalled, placing a big question mark on the future of the refinery project.

There was a time when politicians competed among themselves to lobby for large projects in their respective constituencies and states. This was considered politically rewarding.That was an inevitable phase in a developing country like India. But that is no longer the case since these projects often have very adverse ramifications. An industrial project holds out the prospect for employment opportunities. Those who offer their land for the industrial project invariably get preference for jobs. But now the people refuse to be lured by job offers. This inevitably is a new stage in a growing economy.

So, what will happen to the mega refinery project at Ratnagiri? Certainly, it will go into limbo until the polls are over. It will take at least a year to determine the future of the project which will have to be reconsidered all over again at the political level. Even if the BJP returns to power in the state, it will not be easy to revive the Ratnagiri project which requires 1500 acres of land.

The ideal location for a refinery project is on the West coast. There are other states on the West coast. Small states like Goa or Kerala cannot afford to accommodate such a huge project. Gujarat is an obvious choice but the state already houses two mega refineries of Reliance Industries Ltd and the 20 MMTPA refinery that Rosneft of Russia recently acquired from the Essar group. Indian Oil Corporation’s 12 MMTPA Koyali refinery near Vadodara is also looking to expand capacity.

The project might have been shifted to the coast in Karnataka if the BJP had managed to wrest power in that state. Unfortunately, it blew that chance. Karnataka has a fairly large refinery at Mangalore where the prospect for capacity expansion is circumscribed by the difficulty in acquiring land. There is also no guarantee that the people of Karnataka will welcome another refinery on its coast.

This piquant situation clearly leaves the Modi government in a fix: it cannot afford to abandon the project; nor can it afford to allow popular resentment to the project to destroy its political fortunes. Experts have already questioned the need for such a refinery when the domestic capacity is more than sufficient to meet existing demand. An exportable surplus does not really benefit the country. In their view, the fundamental issue of an appropriate level of refining capacity to meet domestic demand should be the guiding principle that should underpin the rationale for any refinery project. They further contend that export of refined products from India makes no economic sense given the current state of play in the petroleum sector. The argument for the project is also weakened by the problems of mounting environmental costs and the lack of land resources in India.

But every industrial project has been driven by the compulsions of political gains. The political leadership, whether within the BJP or any other rag-tag political coalition, cannot afford to give up the project. It is not going to be advisable to split up the project at this stage and house parts of it in different locations. The project’s biggest allure was its size – and that’s what piqued Saudi interest in the first place.



To download the latest issue 'Volume 25 Issue 7 - July 10, 2018', click here
Petro Intelligence [FREE Access]
Kowtowing to Trump
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Kuwait Prefers A Distance From Saudi
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Gridlocked Gas Grids: The Great Indian Tragedy
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Popular Angst: From Nadigram To Ratnagiri
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Foreign Investment
Vedanta Resources To Delist From LSE
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Overseas Investment
Indian Companies To Invest In UAE
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Gas Scene
LNG imports have consistently increased over the years
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15% Share of Gas in Primary Energy Mix – What it Translates to
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Sectoral Consumption of Natural Gas in May 2018
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Domestic Natural Gas Scene In May 2018
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Salient Features of LPG Profile In Fiscal 2017-18
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Approved LNG Export Facilities
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Update: CGD Factsheet as of April 2018
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International Gas/LNG Prices and Domestic Gas Price
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CGD Sector’s Projected Growth In Coming Years
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Update: Source-Wise LNG Imports and List of Importers in February 2018
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Sector-wise Gas Consumption of Domestic Gas and RLNG in January 2018
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A National Gas Grid Still Far Away, But Making Progress
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India’s Cautious Shale Exploration
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Gas Sourcing & Sector Wise Supply – up to Q3 FY 2018
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CNG/PNG: Attractive Fuel Economics
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PNG Status As On October 1, 2017
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CNG activities in India as on 1st October, 2017
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Data Section
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Retail Selling Price (RSP) & % of taxes in RSP of petrol and diesel in developed countries vis-a-vis India
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Retail Selling Price (RSP) of major products in India & neighbouring countries
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Break up of Central excise duty on petrol & diesel (effective on 2nd February, 2018)
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Share of taxes in Retail Selling Price (RSP) of Petrol & Diesel in Delhi
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Fuel & Loss in Indian refineries in fiscal year 2017-18
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New Petrochemical Complexes and Estimated Feedstock requirement
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Update of Distillate yield of PSU refineries
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Update Of Hydrocarbon Reserves In India
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Power Situation in May, 2018
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India’s Import Of Petroleum Products Down in May, Up In April-May 2018
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India’s Crude Oil Imports Region-wise In April- May 2018
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Gross Refining Margins (GRMs) of Indian refineries during FY 2017-18
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IOC’s market share in pipelines, capacity utilisation and pipeline throughput
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Fuel-wise installed capacity of electricity generation in India as of Dec 2017
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Update - ONGC Overseas Assets
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Update: IOC - Refining market share, Refining throughput, Capacity utilization and Distillate yields
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ONGC Group: Reserves April 1, 2018
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BPCL’s Indian and Global E&P Blocks
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Feedstock & Logistic cost
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Falling Solar Generation Costs
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Refinery-wise Naphtha Production
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Burgeoning Gap in Petrochemicals in India
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Shrinking Share Of Domestic Production In India’s Petroleum Products Consumption
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ONGC
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