Present invention relates to sp2 carbon nanogranules with iron incorporated in it from heavy petroleum residue of a refinery and thereby utilizing the materials for improved synthesis of light olefins (C2-C4) from syngas in a single step Fischer Tropsch synthesis to lower olefins, (FTO). The efficient iron incorporated carbon nanogranules derived from low value heavy petroleum residue are very attractive as catalytic system for direct synthesis of light olefin (C2-C4) from syngas at CO conversion up to 30%.