The bomb was kept in a bag in front of the gate of the refinery in Noonmati area of the city, police said.
Bomb disposal squad safely defused it, they said.
Amonium nitrate and cycle bombs were found inside the bag that could have caused largescale destruction, they said.
A massive search operation has been launched for the culprits and security measures tightened in and around the refinery area.
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