The Supreme Court on Tuesday halted a Karnataka High Court directive that ordered state-run oil marketing companies to consider increasing ethanol supply allocations for a private distiller for the 2025-26 supply year.
A bench comprising Justices M M Sundresh and Sheel Nagu ordered a status quo on the matter while issuing a formal notice on a petition filed by Bharat Petroleum Corporation Limited (BPCL). The public sector company is challenging the High Court’s ruling, arguing that the private manufacturer, VINP Distilleries and Sugars, cannot claim an absolute right to supply ethanol based on its designed production capacity to the detriment of other contracted vendors.
National Blending Policy At Risk
During the hearing, Attorney General R Venkataramani argued that altering the established quotas to favor a single supplier would destabilize India’s national initiative to achieve 20 percent ethanol-blended petrol.
Venkataramani explained that the allocation process for the Ethanol Supply Year 2025-26 had already been finalized on October 17, 2025. Contracts were completed with 378 suppliers for a collective volume of 1,050 crore liters of ethanol. Out of this agreed volume, suppliers had already delivered 680 crore liters to oil marketing companies as of June 18.
Concerns Over Widespread Litigation
The Attorney General warned that increasing the quota of one manufacturer would prompt similar claims from other suppliers, potentially opening the floodgates to widespread litigation.
The legal dispute arose after the Karnataka High Court directed BPCL, Hindustan Petroleum Corporation Limited (HPCL), and Indian Oil Corporation Limited (IOCL) to review a representation from VINP Distilleries for higher allocation. The High Court had ruled that dedicated ethanol plants, which are contractually bound to sell exclusively to public oil marketing companies, should not be denied preferential allocations contemplated under their Long-Term Offtake Agreements.
Government Clarifies Program Status
Following the court proceedings, the Office of the Attorney General issued a clarification to correct media reports that incorrectly characterized the government’s 20 percent Ethanol Blended Petrol Programme as an ongoing experiment with unclear future impacts. The statement emphasized that the initiative is an active national program.
The Attorney General’s office also confirmed that transfer petitions are being initiated to bring similar lawsuits currently pending in various regional high courts directly to the Supreme Court. Consolidating these cases is intended to prevent conflicting rulings and resolve the legal dispute swiftly, ensuring that the continuous supply of ethanol required for the national blending program remains unaffected.
