Supreme Court Directs Status Quo On Ethanol Supply Allocation For 2025-26 As BPCL Says HC Order Will Affect E20 Policy
Here's a Supreme Court order with both energy and environment angles. The court directed status quo on ethanol supply allocation for 2025-26, stepping in after a Karnataka High Court order asked Oil Marketing Companies to reconsider distillery allocations. Ethanol blending, particularly the E20 programme targeting 20 per cent ethanol in petrol, is a flagship government energy policy. For your CLAT prep, know the E20 programme, Ethanol Blending Programme, its benefits for farmers and fuel security, and how OMCs like BPCL and HPCL implement it. That's a recurring GK topic.
The Supreme Court today ordered status quo with regard to ethanol supply allocation for the Ethanol Supply Year (ESY) 2025–26.
A partial Court working days bench of JusticeMM Sundresh and Justice Sheel Nagupassed the order, after hearingAttorney General R Venkataramani(for Bharat Petroleum Corporation Ltd) andSenior Advocate Siddharth Dave(for respondents).
The AG contested a recent Karnataka High Court order, whichdirectedvarious Oil Marketing Companies (OMCs) to consider and decide a representation submitted by a distillery seeking enhancement of ethanol allocation for 2025–26. He argued that the order could destabilize the national policy for 20% ethanol-petrol blending.
On being questioned by the bench as to why the Division Bench of the High Court could not be approached, the AG informed that ethanol supply contracts were finalized in October 2025 itself and several petitions were pending in various High Courts. He sought time to file appropriate transfer petitions.
Hearing him, the bench issued notice and ordered status quo.
To recap, the impugned order of the High Court was passed in the plea of one M/S Vinp Distilleries and Sugar Private Limited, a dedicated ethanol manufacturer, which approached the High Court challenging reduced allocation of ethanol supply despite having established a dedicated ethanol plant. It was the distilleries' case that although its plant had a production capacity of approximately 9.90 crore litres annually, it was allotted only 3.92 crore litres for ESY 2025–26, while its bid was of 9.26 crore litres.
Opposing the plea, the AG had submitted that preferential allocation and best endeavour basis could not become a right to the petitioner company to seek a mandamus upon the OMCs to act in terms of the agreement entered into between the parties. The representation if considered in favour of the petitioner would amount to modification of the Government policy itself, which cannot be permitted in law, he said.
Allowing the plea, the High Court held that the petitioner-company had a legitimate expectation of continuance of the prevailing policy, which arose directly from the agreement entered between the parties and the consistent past conduct of the OMCs.
“Dedicated Ethanol Plants, which have hitherto supplied ethanol exclusively to the OMCs and which are contractually prohibited from either manufacturing anything else or supplying ethanol to any third party, cannot now be relegated to the short end of the stick, thereby visiting them with grave and manifest prejudice,” the Court said.
It added that the petitioner was entitled to issuance of a writ of mandamus directing the concerned OMCs to act in consonance with Clause 6.8 of the agreement, particularly when they themselves invoked the clause to enhance procurement from 1.44 crore litres to 3.92 crore litres.
Case Title: BHARAT PETROLEUM CORPORATION LTD. Versus UNION OF INDIA AND ORS., SLP(C) No. 22411/2026
Debby Jain is a Correspondent with LiveLaw, covering the Supreme Court of India