BackgroundSustainable management of voluminous and hazardous oily sludge produced by petroleum refineries remains a challenging problem worldwide. Characterization of microbial communities of petroleum contaminated sites has been considered as the essential prerequisite for implementation of suitable bioremediation strategies. Three petroleum refinery sludge samples from North Eastern India were analyzed using next-generation sequencing technology to explore the diversity and functional potential of inhabitant microorganisms and scope for their on-site bioremediation.ResultsAll sludge samples were hydrocarbon rich, anaerobic and reduced with sulfate as major anion and several heavy metals. High throughput sequencing of V3-16S rRNA genes from sludge metagenomes revealed dominance of strictly anaerobic, fermentative, thermophilic, sulfate-reducing bacteria affiliated to Coprothermobacter, Fervidobacterium, Treponema, Syntrophus, Thermodesulfovibrio, Anaerolinea, Syntrophobacter, Anaerostipes, Anaerobaculum, etc., which have been well known for hydrocarbon degradation. Relatively higher proportions of archaea were detected by qPCR. Archaeal 16S rRNA gene sequences showed presence of methanogenic Methanobacterium, Methanosaeta, Thermoplasmatales, etc. Detection of known hydrocarbon utilizing aerobic/facultative anaerobic (Mycobacterium, Pseudomonas, Longilinea, Geobacter, etc.), nitrate reducing (Gordonia, Novosphigobium, etc.) and nitrogen fixing (Azovibrio, Rhodobacter, etc.) bacteria suggested niche specific guilds with aerobic, facultative anaerobic and strict anaerobic populations. Phylogenetic Investigation of Communities by Reconstruction of Unobserved States (PICRUSt) predicted putative genetic repertoire of sludge microbiomes and their potential for hydrocarbon degradation; lipid-, nitrogen-, sulfur- and methane- metabolism. Methyl coenzyme M reductase A (mcrA) and dissimilatory sulfite reductase beta-subunit (dsrB) genes phylogeny confirmed methanogenic and sulfate-reducing activities within sludge environment endowed by hydrogenotrophic methanogens and sulfate-reducing Deltaproteobacteria and Firmicutes members.ConclusionRefinery sludge microbiomes were comprised of hydrocarbon degrading, fermentative, sulfate-reducing, syntrophic, nitrogen fixing and methanogenic microorganisms, which were in accordance with the prevailing physicochemical nature of the samples. Analysis of functional biomarker genes ascertained the activities of methanogenic and sulfate-reducing organisms within sludge environment. Overall data provided better insights on microbial diversity and activity in oil contaminated environment, which could be exploited suitably for in situ bioremediation of refinery sludge.Electronic supplementary materialThe online version of this article (10.1186/s12866-018-1275-8) contains supplementary material, which is available to authorized users.