A highly-placed company source said the dismantling of the administrative price mechanism has forced the public sector refinery major to undergo these changes.

Of the Rs 7,852 crore, Rs 4,000 crore has been earmarked for expansion of crude oil refining capacity by six mmtpa to 13.50 mmtpa along with the setting up of single buoying Moore facility for reducing the cost towards crude oil handling and it would help to bridge the projected deficit in LPG, naptha and HSD in the southern region, sources added.

Another Rs 3,000 crore has been earmarked for power generation project under joint venture by utilising the residue of the refinery in Kerala. The diesel hydro-desulphurisation project for the reduction in sulphur content of HSD from 1 per cent to 0.25 per cent is alreadyunder implementation, sources said, adding the project is estimated to cost about Rs 852 crore.