Essar Oil said it has renewed an agreement to sell 2 million tonne a year of petroleum products like diesel and petrol to Indian Oil Corp for three years to 2015.

Essar Oil Ltd a subsidiary of the London-listed Essar Energy and IOC have renewed the major product sale and purchase agreement.

The Mumbai based firm in a statement said that "The renewed three-year agreement, running from 2012 to 2015 requires EOL to supply diesel, petrol, kerosene and ATF (aviation turbine fuel) to IOC from its Vadinar Refinery, totaling 2 million tonne every year.”

The agreement also entitles Essar Oil to purchase products from IOC and gives the two companies the option of sharing each other's distribution infrastructure.

Essar Oil has similar product sale and purchase agreements with two other state owned oil marketing companies, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.

The company, however, did not give details of its agreement with BPCL and HPCL.

Mr S Thangapandian CEO (marketing) of Essar Oil said that "Once the ongoing expansion project is completed, our Vadinar refinery will be able to serve our PSU customers better, especially in terms of meeting the growth in domestic demand for Euro IV grade fuels."

Mr Karandikar GM (Supplies) of IOC said that "Given the rapid growth in petro product demand in India and the additional capacity that will soon come on stream at Essar's Vadinar refinery, we look forward to increasing the offtake volumes."

(Sourced from PTI)