The Supreme Court on Tuesday ordered maintenance of status quo on ethanol allocation for the Ethanol Supply Year (ESY) 2025-26
NEW DELHI — The Supreme Court on Tuesday ordered maintenance of status quo on ethanol allocation for the Ethanol Supply Year (ESY) 2025-26, temporarily staying the effect of a Karnataka High Court direction requiring oil marketing companies (OMCs) to reconsider the allocation made to a dedicated ethanol manufacturer.
A bench of Justices M.M. Sundresh and Sheel Nagu passed the interim order while hearing a special leave petition (SLP) filed by Bharat Petroleum Corporation Limited (BPCL) challenging the June 16 judgment of the Karnataka High Court.
The apex court issued notice to the respondents and directed that the existing allocation process remain undisturbed till the next date of hearing.
"Issue notice. List on reopening. Till the next date of hearing, there shall be status quo," the Justice Sundresh-led Bench ordered.
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Appearing for BPCL, Attorney General (AG) R. Venkataramani contended that the Karnataka High Court's direction to reconsider the representation of VINP Distilleries and Sugars Pvt. Ltd. seeking enhancement of its ethanol allocation could destabilise the Centre's ethanol blending policy and disrupt the ongoing procurement process.
The AG submitted that ethanol supply contracts for ESY 2025-26 had already been finalised in October 2025 and supplies under the contracts were underway. The Centre’s highest law officer argued that no company could claim a legal entitlement to a higher ethanol quota and that judicial directions effectively altering the allocation methodology would amount to interference with government policy.
The Union government also informed the apex court that multiple petitions raising similar issues were pending before different High Courts and sought liberty to file transfer petitions for an authoritative decision by the Supreme Court.
During the hearing, the Centre submitted that the E20 fuel programme -- which involves blending 20 per cent ethanol with petrol -- is still at an evolving stage, and the policy is intended to strengthen India’s energy security, augment farmers’ income, and reduce carbon emissions.
The SLP before the apex court arose from a June 16 Karnataka High Court judgment directing BPCL, the Indian Oil Corporation, and the Hindustan Petroleum Corporation to consider and decide a representation filed by VINP Distilleries seeking enhancement of its ethanol allocation for ESY 2025-26 under the long-term offtake agreement executed with the OMCs. The Karnataka High Court had held that the representation deserved consideration in light of Clause 6.8 of the Long-Term Offtake Agreement, under which dedicated ethanol plants claimed preferential allocation on a "best endeavour basis".
It observed that the national Ethanol Blended Petrol Programme was conceived to promote energy security, environmental sustainability and increased ethanol production through dedicated plants established pursuant to government policy.
According to BPCL, which coordinates ethanol procurement under the Centre's Ethanol Blended Petrol Programme, reopening allocations after the tender process had concluded and supplies had commenced could have cascading consequences for the nationwide ethanol blending programme and affect allocations already made to other suppliers.