After hearing the parties, the Bench issued notice on the plea and directed the parties to maintain status quo until the matter is taken up for hearing after the apex court resumes regular sittings on July 13.
The Supreme Court on Tuesday (June 30, 2026) ordered status quo on a Karnataka High Court direction requiring the reopening of the ethanol allocation process for the 2025–26 supply year, which has already been concluded.
A Bench comprising Justices M M Sundresh and Sheel Nagu was hearing a plea filed by state-owned Bharat Petroleum Corporation Ltd. (BPCL), which contended that reopening the allocation process would disrupt the implementation of the Centre’s policy of achieving 20 per cent ethanol blending in petrol, popularly known as E20 fuel.
In its order dated June 16, 2026, the High Court had directed the oil marketing companies (OMCs) — BPCL, Hindustan Petroleum Corporation Ltd. (HPCL) and Indian Oil Corporation Ltd. (IOCL) — to consider a request by VINP Distilleries and Sugars for an enhanced ethanol allocation before the tender process was finalised.
The High Court had held that dedicated ethanol plants, established pursuant to the government’s policy and contractually bound to supply ethanol exclusively to the OMCs, could not be denied the benefit of preferential allocation contemplated under the applicable agreement. Accordingly, it directed the OMCs to consider the distillery’s request for enhanced allocation for the Ethanol Supply Year (ESY) 2025–26.
‘Disruption to allocation process’
Appearing for BPCL, Attorney General R Venkataramani submitted that, as the industry coordinator for the Ethanol Blended Petrol (EBP) programme, BPCL had completed the allocation exercise on October 17, 2025. He said procurement quantities had been allocated to 378 suppliers for a total of about 1,050 crore litres of ethanol, against cumulative offers of 1,759 crore litres received under the tender. By June 18, nearly 680 crore litres had already been supplied.
The Attorney General argued that enhancing the allocation of one supplier at this stage would trigger similar claims from other similarly placed suppliers, thereby disrupting the entire allocation process.
“The effect of this order is that there are about 75 similarly placed suppliers… We have to undo the allocation for all of them,” he submitted.
Venkataramani further submitted that the ethanol blending programme was still evolving and that its impact would become clearer over time.
fall in demand
“Every year there may either be a spurt in demand or a fall in demand. The 20% ethanol blending programme is still something the government is trying to experiment with. By next year, October onwards, probably the demand may go down,” he said.
The Bench, however, questioned why BPCL had approached the Supreme Court directly instead of filing an appeal before a Division Bench of the Karnataka High Court. “Why not approach the Division Bench?” Justice Sundresh asked. The law officer submitted that similar petitions were pending before several High Courts and sought liberty to file a transfer petition to have them heard together by the apex court. He argued that an authoritative ruling was necessary before the next round of ethanol supply contracts was finalised in October. “If I go before the Division Bench and then again to other High Courts, it will be delayed,” he submitted. Senior advocate Sidhartha Dave, appearing for VINP Distilleries and Sugars, opposed the request, describing the proposed transfer petition as a “bogey”.
After hearing the parties, the Bench issued notice on the plea and directed the parties to maintain status quo until the matter is taken up for hearing after the apex court resumes regular sittings on July 13.
“Issue notice. List on reopening. Till the next date of hearing, there shall be status quo,” the Bench ordered.The Union government amended the National Policy on Biofuels in 2022 to accelerate the phased blending of ethanol with petrol.
Under the revised policy, the target was to achieve ethanol blending of 12.06 per cent in 2022–23, 14.6 per cent in 2023–24 and 17.98 per cent in 2024–25 (up to February 2025), before reaching the milestone of 20 per cent blending. The government has since achieved the 20 per cent blending target. The programme has, however, attracted criticism over its potential impact on older vehicles and fuel efficiency. The Centre has dismissed these concerns, maintaining that there is no evidence to suggest that ethanol-blended petrol causes mechanical damage to vehicles.
Govt clarifies
However, in a statement issued late on Tuesday by the Ministry of Law and Justice, the office of the Attorney General stated that reports referring to remarks about the E20 programme being an “experiment” were “completely false”. “It is clarified in explicit terms that any suggestion that the Government described the E20 programme before the Hon’ble Supreme Court as an ‘experiment’ is incorrect and does not represent the submissions made on behalf of the Union of India,” the statement said.
Published on June 30, 2026
