Bhubaneswar, Jan. 19: The Indian Oil Corporation (IOCL) today appreciated the Odisha government's support in making the Paradip oil refinery project viable by deferring the collection of value added tax (VAT) by 11 years.

Addressing a news conference here, Sanjiv Singh, director (refineries), Indian Oil, said: "The oil refinery business is a very low-margin profit business. Here, business is decided by outside factors such as crude oil price in the world market. At this point, the state government's support is crucial."

He said according to the agreement with the state government, the Indian Oil would start paying VAT 11 years after the refinery commences commercial production that began last November.

IOCL had signed a memorandum of understanding (MoU) with the state government in February 2004 to set up the refinery.

"We are also paying the central excise tax from which Odisha gets its due share. Besides, the state government will also generate revenue from other sources once ancillary units are set up," he said.

Singh said the oil refinery had given due support to the local employment and also took care of the issue of rehabilitation of the displaced families.

Prime Minister Narendra Modi will dedicate the state-of-the-art 15 million metric tonne per annum (MMTPA) capacity Paradip refinery to the nation on February 7. "For better profit, the refinery is designed to process 100% high sulphur, including 40% heavy crude oil of low-cost, and will produce various petroleum products such as petrol, diesel, kerosene, aviation turbine fuel, propylene, sulphur and petroleum coke," said Singh.

Stating that the oil refinery is among the most advanced refineries in the world, Singh said it would serve as a catalyst for energising the industrial and economic development of the entire region.

Paradip refinery has a unique "Indane maximisation (Indmax) unit technology", which is indigenously developed by Indian Oil (R&D) scientists and engineers. "The Indmax unit is designed to produce 44% LPG, highest from such plants. With this technology, Indian Oil is now recognised globally as a technology supplier. Implementation of the technology is Indian Oil's true tribute to the Make in India initiative of Prime Minister Narendra Modi," he said.

The other first-time technical features such as flue gas desulphurisation facilities, vapour recovery system from jetty loading are the hallmark of Paradip refinery that will ensure environment-friendly operation with minimum impact on the eco-system.