Rajasthan’s long nurtured dream of an oil refinery will come another step closer to realisation with the State government signing a Memorandum of Understanding (MoU) with the Hindustan Petroleum Corporation Ltd (HPCL) on Thursday to set up the State’s first oil refinery in Barmer. Union Petroleum Minister M. Veerappa Moily will also be present on the occasion.

“Earlier the capacity of the refinery was to be 4.5 million tonne, but now it has been increased to 9 million tonne,” Chief Minister Ashok Gehlot said here on Wednesday.

The State government’s long pending proposal for setting up a refinery in Barmer had been approved by HPCL board members last week.

Earlier last month, the State, which has been demanding a refinery ever since crude oil was discovered in the Barmer-Sanchore basin, had given in-principle approval to provide a financial package of Rs.3,376 crore to HPCL.

The refinery will be set up at a cost Rs.37, 229 crore, of which the State government’s contribution will be 15 per cent to 26 per cent, said Mr. Gehlot.

The project, to be completed in another four years, is expected to indirectly provide employment to 1.25 lakh people.