The Supreme Court directed maintenance of status quo on the Karnataka High Court order enhancing ethanol allocation for ESY 2025–26. The Court was hearing an oil marketing company’s plea claiming that the direction could affect the national policy targeting 20% ethanol blending in petrol.
The Supreme Court on Tuesday ordered that status quo be maintained regarding an order passed by the Karnataka High Court. The Karnataka High Court had directed enhancement of ethanol allocation for the Ethanol Supply Year (ESY) 2025–26. The apex court was hearing a petition filed by an oil marketing company, which argued that the High Court’s directions would disrupt the national policy of maintaining 20% ethanol blending in petrol.
A bench comprising Justices M M Sundresh and Sheel Nagu issued notice on the plea moved by Bharat Petroleum Corporation Ltd (BPCL), challenging the High Court order.
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The Karnataka High Court had directed Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited, and Indian Oil Corporation Limited to consider and decide a representation submitted by a dedicated ethanol manufacturer seeking an increase in ethanol allocation for ESY 2025–26.
The High Court had ruled that dedicated ethanol plants set up under government policy backed by contractual obligations to supply ethanol exclusively to Oil Marketing Companies (OMCs) could not be denied the benefit of preferential allocation contemplated under the Long-Term Offtake Agreement (LTOA).
Attorney General R Venkataramani argued that the High Court’s direction requiring OMCs to consider enhanced ethanol allocation for VINP Distilleries and Sugars would destabilise the national policy.
The Attorney General submitted,
“The 20 per cent ethanol blending programme in petrol is still an ongoing experiment and the impact of the policy would become clearer by next year,”
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He also pointed out that the ethanol supply contracts were finalised in October 2025, stating that:
“The ethanol allocation exercise attained finality on October 17, 2025, and allocations were communicated to 378 suppliers for a total supply of 1,050 crore litres of ethanol, of which 680 crore litres had already been supplied by them by June 18”
He added,
“If one supplier’s quota was enhanced, other similarly placed would claim parity which would open litigation floodgates,”
In its petition, BPCL submitted that VINP Distilleries, as a private supplier, cannot claim an unconditional right to receive ethanol allocation purely based on its designed production capacity especially in a manner that could affect other suppliers, particularly since allocations have already been provided to other vendors.
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