The oily water having high BOD COD increases the load on an effluent treatment plant. The conventional treatment systems generate sludge which causes challenges to dispose. The disposal to CETP is also expensive for small units. The oily water when passed through the membrane based system results in the separation of the oil from water. In this manner, oil can be concentrated starting from low % and reaching up to 30-50 %. Oil content in the permeate water will be very low making it suitable for tertiary treatment by mixing in common ETP with other effluent. The concentrated oil with high calorific value can be sold to recyclers.