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Danger looms over existence of century old oil refinery

By Daya Nath Singh |


Established in 1901 Digboi oil refinery is not only India’s, but Asia’s first oil refinery, which is now losing its glory due to present marketing policy and mismanagement. According to the workers of the refinery the journey of oil industry in India began from Digboi in Assam. After long sixty years, Indian Oil Corporation Ltd (IOCL) came into existence in 1962, with its first refinery at Guwahati. Under the IOCL and even prior to that there was no effort by the management to increase the production capacity of this refinery. Whereas, for the survival of refinery its capacity should have been increased to 9 million MT, it came down to 0.65 million tons. In the meantime, the IOCL increased the capacity of outside refineries, but for Digboi, it maintained the plea of scarcity of crude oil and the market.


Mineral Oil Workers Union (MOWU) representing the workers of Digboi refinery have now demanded to establish a separate Assam Oil Marketing Division for the Northeastern region, with its Head Quarters at Guwahati. It has argued, when IOCL could supplying crude oil from Mumbai seashore to the Mathura refinery in Uttar Pradesh and from Haldia sea port to Barauni refinery in Bihar, why the Assam Oil Company could not get fair treatment from the government. Recently, IOCL has prepared a project report to increase the production of Numaligarh refinery from 3 million metric ton to 8 million metric ton, but it has shown its inability to increase the capacity of century old Digboi refinery on various grounds. The Union has alleged that the Centre and state governments, IOCL and AOC high officials are playing discriminatory role in respect of Digboi refinery.


It may be mentioned in this context that Assam Oil Marketing Division was brought under the Indian Oil Corporation Ltd, in the year 2008 and in the name of North East Integrated State Office (NEISO), an office was opened at Guwahati. This office is controlled by Kolkata based marketing division’s Eastern Division Office. The workers of Digboi were given to understand that there would be no change in the Assam Oil Division (AOD) marketing and by cutting down the expenses the profit would be increased. This assurance did not carry any meaning and the AOD marketing has been lost, the union alleged. Losses have increased due to reduced production and Assam Oil Company (AOC) and its historic sign of Rhino have now been removed. A number of workers and officials from IOC have occupied the positions in AOD offices.


Further, due to Eastern Regional Divisional office operating from Kolkata all the functions related to appointments, contracts, printing and miscellaneous items’ purchases are done at Kolkata. As a result the people of the Northeastern region are deprived of these opportunities. Even now, Assam Oils’ LPG plant, distributional terminal, retail outlets are more than the IOCL Marketing Division. The office establishment of AOD is also better than the IOCL Marketing Division.


It is vital to remember that Assam Oil Company was nationalized in 1981 and it was recognized as a division of Indian Oil Corporation (IOCL), because it has its refinery, pipelines as well as marketing network. At this stage, if it loses marketing network, there would be no Assam Oil Division, workers fear. The refinery would have to depend on production of .65 million MT oil refining capacity and incurring heavy losses which would let the factory die. There would be no Digboi without Assam Oil. Besides, not a single industry came up in Digboi during last one century, except the Assam Oil refinery. Till now there is no downstream industry and day by day the number of workers in the refinery is going down. Since the year 2006 more than five hundred workers have retired from the services and at present the number of workers stands at 1700 only. The doors are closed for new appointments and very shortly the number of workers is likely to go down to 1000. Under the circumstances, the Mineral Oil Workers Union has demanded that Indian Oil Corporation should constitute a separate division for North Eastern Region with its headquarters at Guwahati to do entire marketing works. The Assam Oil Division is confident of doing successful business in the Northeastern region. The Union has also demanded that till the constitution of a new division AOD should be given the responsibility of marketing in the region.




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