Supreme Court Directs Status Quo in India's Ethanol Blending Case

NEW DELHI: The government on Tuesday told the Supreme Court that India's 20 per cent ethanol blending programme in petrol is still an ongoing experiment and that the impact of the policy is expected to become clearer by next year. The submission came during a hearing on a plea filed by Bharat Petroleum Corporation Limited (BPCL), which challenged a Karnataka high court order relating to ethanol allocation for the 2025-26 Ethanol Supply Year. Appearing for the Centre, Attorney General R Venkataramani argued that any judicial intervention in the allocation process at this stage could unsettle the government's national ethanol blending policy. He submitted that the 20 per cent ethanol blending programme remained an ongoing experiment and that its impact would become clearer by next year, reported news agency PTI. The Supreme Court, meanwhile, directed the parties to maintain status quo on the Karnataka high court's order while issuing notice on BPCL's appeal.

A bench of Justices M M Sundresh and Sheel Nagu was hearing BPCL's challenge to the high court's direction asking Oil Marketing Companies to consider a representation filed by VINP Distilleries and Sugars seeking enhanced ethanol allocation for the 2025-26 supply year. The Karnataka high court had held that dedicated ethanol plants established under the government's policy and bound by Long-Term Offtake Agreements (LTOAs) to supply ethanol exclusively to Oil Marketing Companies (OMCs) could not be denied the benefit of preferential allocation envisaged under those agreements. It had directed Bharat Petroleum Corporation Limited, Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited to consider and decide the company's request for enhanced allocation.

Opposing the order, Venkataramani submitted that the ethanol allocation process had already concluded in October 2025, when supply contracts were finalised. He informed the court that ethanol allocations had been communicated to 378 suppliers for a total of 1,050 crore litres, of which around 680 crore litres had already been supplied by June 18. The attorney general further argued that increasing the allocation of one supplier would encourage similarly placed companies to seek the same relief, potentially opening the floodgates to litigation and affecting implementation of the national policy. In its petition before the apex court, BPCL contended that VINP Distilleries could not claim an absolute right to supply ethanol merely on the basis of its production capacity, particularly after allocations had already been made to suppliers under the existing framework. The company maintained that altering the allocation process after its conclusion could disrupt the government's ethanol blending programme.