NEWS : Three state-owned oil marketing companies and three public sector banks entered into a long-term purchase agreement for the upcoming five dedicated ethanol plants across India recently

DETAILS

• WHICH ARE THE COMPANIES – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation
• WHICH ARE THE BANKS – SBI, Indian Overseas Bank and Indian Bank
• It is regarding payment towards supply of ethanol
• Ethanol produced by the dedicated plants will be sold to OMCs to blend with petrol
• Indian pumps are likely to start selling petrol blended with 20% ethanol by 2025. Pact may bring down the cost per litre by nearly Rs 10 and also help reduce inflation significantly.
• Ethanol will be blended with petrol to reduce the quantity of petrol that a vehicle uses. Hence, it will reduce import dependence on the country, which ships more than 85% of its oil requirement from overseas.
• However, the major challenge is the deficit of ethanol to achieve this target. India requires 1,016 crore litres of ethanol to achieve the 20% target in 2025-26.