Supreme Court orders status quo on ethanol allocation:Centre says 20% blending policy to continue, impact to be clearer next year

The Supreme Court on Tuesday directed that there should be no change in ethanol allocation for the Ethanol Supply Year (ESY) 2025-26, while hearing a petition related to ethanol supply quotas. During the hearing, Attorney General R. Venkataramani, appearing for the Centre, told the court that the government’s policy of blending 20% ethanol with petrol (E20) will continue unchanged. He said the full impact of the policy would become clearer by next year. A bench comprising Justice M.M. Sundresh and Justice Sheel Nagu passed the order while hearing an appeal filed by Bharat Petroleum Corporation Limited (BPCL). The Attorney General argued that a Karnataka High Court order directing oil marketing companies (OMCs) to reconsider ethanol allocations could affect the Centre’s nationwide E20 blending programme. He also informed the court that similar petitions are pending before several High Courts and sought the transfer of all such cases to the Supreme Court to avoid conflicting rulings. The bench questioned why BPCL had not challenged the Karnataka High Court’s order before a larger bench. In response, Venkataramani said ethanol supply agreements for the 2025-26 supply year had already been finalised in October 2025, and multiple proceedings in different High Courts could delay implementation of the national policy. After the hearing, the Attorney General reiterated that the government’s E20 policy would remain unchanged, although the quantity of ethanol allocated to individual oil companies may vary depending on demand and other operational requirements. The dispute arose after Winp Distilleries and Sugar Pvt. Ltd. approached the Karnataka High Court, claiming it had established an ethanol plant with an annual production capacity of 9.9 crore litres but was allocated only 3.92 crore litres for the 2025-26 supply year despite bidding for 9.26 crore litres. The Centre argued that receiving higher allocations in previous years does not entitle a company to similar allocations in subsequent years, warning that accepting such claims could disrupt the government’s allocation policy. However, the Karnataka High Court observed that the company had a legitimate expectation based on previous allocations and directed OMCs to reconsider its application. The case comes amid concerns over the use of E20 petrol in older vehicles. The government has maintained that there is no scientific evidence showing that E20 fuel damages vehicles. On June 24, the Ministry of Petroleum and Natural Gas clarified that E20 petrol is safe for use and that filling E20 fuel does not invalidate vehicle insurance. The Centre has said ethanol-blended petrol is already widely used in countries such as the US, Brazil and Japan. According to the government, the ethanol blending programme has helped India save more than ₹1.4 lakh crore in foreign exchange on crude oil imports while improving energy security, reducing emissions and increasing income opportunities for farmers. India achieved its target of 20% ethanol blending in petrol five years ahead of schedule, with nationwide E20 fuel supplies beginning on April 1. The government is now aiming to increase ethanol blending to 30% by 2030.