GUWAHATI, March 18 ? It is a mere refinery with only 0.65 million metric tonne per annum (MMTPA) capacity. It has no contribution to the industrial development of the country and hence it can never deserve a special treatment. Perhaps, this was the belief in the higher echelons of the Central Government when the announcement for 50 per cent excise duty relief to Digboi Refinery was made recently. The Refinery has been making feverish pleas for the past several years to provide it with a 100 per cent excise duty relief only to enable it to go for product diversification. But the said belief among those who matter in the Oil Ministry has made it impossible for this historic refinery to secure such a relief.
However, anyone conversant with the history of industrial development will surely refuse to subscribe to the above approach of the Government. Why? The history of Digboi Refinery is inalienably linked with the industrial development of the country for more than a century now. It started with the discovery of oil in Digboi in 1889 ? that is, only two decades after oil was first struck in Pennsylvania in 1863! The Refinery at Digboi was built in 1901 by the erstwhile Assam Oil Company, a company incorporated in England. The Refinery had a number of units added to it in the twenties and thirties of the last century. For over five decades, Digboi Refinery remained the only refinery of the country, until the commissioning of the Barmah Shell Refinery at Trombay in 1956. And today, the Refinery has been continuing its service to the nation withstanding all the impediments coming on its way. Even during the most trying of circumstances, like the two World Wars, the Great Earthquake of 1950, the Chinese aggression in 1962, the Indo-Pak wars of 1965 and 1971, besides the recurring floods, it has been rendering unstinted service to the nation. Instances can also be cited of the Refinery and the Assam Oil Company maintaining oil supply with the help of elephants and helicopters to the far flung areas.
However, it was due to the policy decisions of the Central Government that the Assam Oil Company had much of its exploration and production activities curtailed with the formation of the Oil India Limited in 1958 with a view to looking after the exploration and production activities of the Assam Oil Company. Again, in 1981 the Assam Oil Company (AOC) was bifurcated ? the Digboi oil field was handed over to the Oil India Ltd. and the refining and marketing part of the AOC was merged with the Indian Oil Corporation Ltd. (IOC), and the AOC became a part of the IOC and came to be known as the Assam Oil Division (AOD) of the IOC. Thus, the Refinery was made to lose a competitive advantage by way of surrendering its exploration and production wing to Oil India. The State has an investment of over Rs 1400 crore for capacity augmentation, value addition and environmental upgradation of the Refinery in the post-nationalisation period. The AOD today commands a market share of 60 per cent of LPG in the North-east region of the country.
With its supply line through more than 300 petrol pumps, more than 200 LPG distributorships and about 400 SKO/LDO agencies it has been generating employment opportunity for lakhs of people in a region where unemployment problem has been posing a serious threat to the society. The proposal to enhance the capacity of the Refinery to 3 MMTPA from 0.5 MMTPA was shelved with the signing of the Assam Accord in 1985. The Accord led to the emergence of a new refinery ? the Numaligarh Refinery. Digboi Refinery was allowed expansion of its capacity to only 0.65 MMTPA. It was another wrong done to the Refinery. Despite all these, the Refinery went for 30 per cent capacity enhancement after 1997 and it is embarking upon adding new units to produce many value added products like the high quality, high value microcrystalline wax, environment friendly ?green? fuels and high quality bitumen.
The Union Ministry of Finance, as part of the Prime Minister?s economic package for the North-east region, announced excise duty exemptions, on July 8, 1999 (Notification No. 33/99 ?Central Excise), to certain industries, including the mineral-based industries, with the conditions that such units should come into existence on or after December 24, 1997, or the units should have their capacity expanded, by not less than 25 per cent, on or after December 24, 1997. Digboi Refinery has a legitimate claim for such an excise duty relief for its expanding its capacity by 30 per cent after 1997. After a long persuasion the Central Government agreed, that too grudgingly, to accord only 50 per cent excise duty relief to Digboi Refinery, even though instances are there that 100 per cent excise duty relief was granted to certain industrial units by the Central Government even by amending its notification! Will the State Governments and the MPs from the NE region ask the Central Government ? why this discrimination against Digboi Refinery? Is it for its being located in the NE region?