SC orders status quo on Karnataka HC direction to reopen ethanol allocation process
The Supreme Court ruled on Tuesday, June 30, 2026 status quo Following the direction of the Karnataka High Court requiring reopening of the ethanol allocation process for the already concluded 2025-26 supply year.
A bench comprising Justices MM Sundresh and Sheel Nagu ruled that state-owned Bharat Petroleum Corporation Ltd. He was hearing a plea filed by (BPCL), which claimed that reopening the allocation process would disrupt the implementation of the Centre’s policy of blending 20% ethanol in petrol, popularly known as E20 fuel.
The Supreme Court, in its judgment dated June 16, 2026, directed oil marketing companies (OMCs) v. BPCL, Hindustan Petroleum Corporation Ltd. (HPCL) and Indian Oil Corporation Ltd. (IOCL) – had instructed them to consider VINP Distillery and Sugars’ request for enhanced ethanol allocation before the tender process is completed.
The Supreme Court held that private ethanol plants established as per government policy and contractually obliged to supply ethanol only to OMCs cannot be denied the benefit of preferential allocation contemplated under the applicable agreement. Accordingly, it directed the OMCs to consider the distillery’s request for increased allocation for the Ethanol Supply Year (ESY) 2025-26.
‘It will disrupt the allocation process’
Speaking on behalf of BPCL, Solicitor General R. Venkataramani informed that BPCL, as the industry coordinator of the Ethanol Blended Petrol (EBP) programme, has completed the allocation exercise on October 17, 2025. He said that against the cumulative bids of 1,759 crore liters received under the tender, the procurement quantities have been allocated to 378 suppliers for a total of around 1,050 crore liters of ethanol. As of June 18, around 680 crore liters had been supplied.
The Chief Public Prosecutor argued that increasing the allocation of a supplier at this stage would trigger similar requests from other suppliers in a similar position and therefore the entire allocation process would be disrupted.
“The effect of this order is that there are about 75 similar suppliers… We have to de-allocate all of them,” he said.
Mr. Venkataramani also noted that the ethanol blending program is still evolving and its impact will become clearer over time.
“There may be an increase or decrease in demand every year. The 20% ethanol blending program is still something the government is trying to experiment with. Next year, from October onwards, demand may probably decrease,” he said.
However, the Bench questioned why BPCL approached the Supreme Court directly instead of appealing to the Division Bench of the Karnataka High Court.
“Why don’t you approach the Division Bench?” Judge Sundresh asked.
The law officer noted that similar petitions were pending before several High Courts and sought freedom to file a transfer petition for hearing of them together in the apex court. He argued that an authoritative decision was needed before the next round of ethanol supply contracts were finalized in October.
“If I appear before the Division Bench and then go again to other High Courts, it will be delayed,” he said.
Senior advocate Sidhartha Dave, working for VINP Distillery and Sugars, opposed the request, describing the proposed transfer petition as “bogey”.
After hearing the parties, the Board issued a notice regarding the defense and instructed the parties to continue the case. status quo Until the matter was taken up for hearing after the high court resumed regular sessions on July 13.
“Issue notice. List of reopening. Until next hearing date, status quo” the Loom ordered.
But the Ministry of Law and Justice said in a statement late Tuesday that the Attorney General’s Office had clarified that reports referring to statements that the E20 program was an “experiment” were “completely false”. “It has been made clear that any suggestion that the government described the E20 program as an ‘experiment’ before the Hon’ble Supreme Court is false and does not represent submissions made on behalf of the Union of India,” the statement said. expressions were used.
The Union government has amended the National Policy on Biofuels in 2022 to accelerate the phased blending of ethanol with gasoline. Under the revised policy, the target was to achieve 12.06% in 2022-23, 14.6% in 2023-24 and 17.98% in 2024-25 (by February 2025) before reaching the 20% blending milestone.
The government has since achieved its 20% blending target. However, the program has faced criticism for its potential impact on older vehicles and fuel efficiency.
The center dismissed those concerns, saying there was no evidence to show that ethanol-blend gasoline caused mechanical damage to vehicles.
It was published – 30 June 2026 19:18 IST
