Supreme Court Maintains Status Quo on Ethanol Allocation Amid BPCL Concerns Over E20 Fuel Program
The Supreme Court has issued a pivotal ruling in favor of Bharat Petroleum Corporation Limited (BPCL), temporarily halting a directive from the Karnataka High Court that required oil marketing companies (OMCs) to reassess ethanol allocations for the 2025–26 supply year. This decision provides significant relief to OMCs and supports the Central Government’s E20 fuel initiative, which aims to blend 20% ethanol with petrol to enhance energy security and reduce emissions.
The Supreme Court’s intervention came as a response to a petition filed by BPCL, represented by Attorney General R. Venkataramani. BPCL argued that revisiting the ethanol distribution process, which had already been finalized with contracts and commenced supplies, could jeopardize the government’s ethanol blending program. The program’s goal is to increase ethanol content in petrol to 20%, known as E20 fuel.
A bench comprising Justices MM Sundresh and Sheel Nagu issued notices to dedicated ethanol plants that had secured a favorable order from the Karnataka High Court, which had directed OMCs to reconsider ethanol supply agreements. “Issue notice. List on reopening. Till the next date of hearing, there shall be status quo,” the Supreme Court ordered.
BPCL, coordinating the Ethanol Blended Petrol (EBP) program, emphasized that the allocation process, completed in October 2025, had already resulted in significant ethanol deliveries. The company challenged the Karnataka High Court’s decision to reconsider allocations made to VINP Distilleries and Sugars, arguing that such changes could disrupt the supply chain and affect the broader implementation of the ethanol blending policy.
During proceedings, the bench questioned BPCL’s decision to approach the Supreme Court directly instead of a division bench in the Karnataka High Court. Attorney General Venkataramani highlighted the national implications of the issue, with similar challenges pending in various High Courts, and sought permission to file a transfer petition to consolidate these cases for a unified Supreme Court hearing.
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Senior Advocate Sidhartha Dave, representing VINP Distilleries, opposed the transfer petition, labeling it as a diversion. Venkataramani insisted on the urgency of resolving the matter before October, given its significance to the E20 fuel program.
The dispute originated from the Centre’s Ethanol Blended Petrol (EBP) Program, which procures ethanol from sugar mills and distilleries to blend with petrol. VINP Distilleries, having established a dedicated ethanol plant (DEP) under a long-term offtake agreement (LTOA), faced reduced allocations in recent tenders due to new clauses allowing OMCs to procure from non-DEPs.
BPCL allocated 1.44 crore litres of ethanol to VINP, considerably less than their bid for 9.26 crore litres. Following the OMCs’ lack of response to VINP’s complaint, the company sought relief from the Karnataka High Court, which ordered the reconsideration of allocations. BPCL’s appeal to the Supreme Court argues that reopening the concluded procurement process could trigger similar claims from other suppliers, disrupt the supply chain, and hinder the Centre’s ethanol blending objectives.
The case is set to be heard further, with the Supreme Court maintaining the status quo until the next date of hearing.
