The aim of this study was to develop students' chemical literacy by integrating dilemma stories into a Science, Technology, Engineering, Arts, and Mathematics (STEAM) project on petroleum. Chemical literacy can help students face future challenges by applying what they learn about chemistry subjects at school to solve problems in their daily lives. A qualitative research method was employed that included interviews, observations, reflective journals, chemical literacy tests, and student activity sheets, as data collection tools. Thirty six secondary school students participated in the research using a project-based approach consisting of five steps: value reflection, problem-solving, project monitoring and evaluation, project development, and transformation. This study used four chemical literacy components according to Shwartz, Ben-Zvi and Hofstein (2006) namely scientific and chemical content knowledge, characteristics of chemistry, chemistry in context, higher-order learning skills, and affective aspect. STEAM integrated with dilemmas stories provides opportunities for students to develop chemical literacy through value reflection, problem solving, and STEAM project. This study uses a dilemma story to understand chemistry concepts whereby students can develop a project by integrating chemistry and STEAM principles. The STEAM Project involved making alternative fuel to find a solution to a problem presented in the dilemma story. The researchers were challenged by the need to find a suitable chemistry-based dilemma story to integrate with a STEAM project while also empowering students and managing time resources.