SC allows OMCs to procure additional 1.49 billion litres of ethanol

Suppliers without long-term offtake agreements will be treated on a par with other bidders under the interim arrangement accepted by the Supreme Court

The Supreme Court on Tuesday allowed public sector oil marketing companies (OMCs) to award contracts for the procurement of an additional 1.49 billion litres of ethanol to Quarter IV bidders for the Ethanol Supply Year (ESY) 2025-26.

 

The order was passed in a batch of petitions concerning ethanol procurement under the Centre’s Ethanol Blended Petrol Programme (EBPP).

 

As part of the interim arrangement accepted by the court, suppliers without long-term offtake agreements (LTOAs) with OMCs will be treated on a par with other suppliers for the additional procurement.

 

Attorney General R Venkataramani, appearing for Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation, proposed the arrangement before the court. The proposal was supported by the petitioners challenging an earlier Karnataka High Court order.

 

The batch of cases is led by Modi Biotech Private Limited and Others v VINP Sugars and Distilleries Private Limited. The petitioners have challenged a June 16 order of a single judge of the Karnataka High Court directing OMCs to consider a representation by VINP Sugars, an LTOA holder, seeking procurement of ethanol up to its design capacity.

 

While passing the interim order, the Supreme Court also questioned the basis of the High Court’s direction, observing that it was “at pains to understand” its merit or basis.

 

Senior advocates Ranjit Kumar and Amit Sibal appeared for Modi Biotech and were briefed by law firm Karanjawala & Co Advocates.

 

The interim arrangement was opposed by some parties. Senior advocate Mukul Rohatgi appeared for LTOA units established during 2023-24, while senior advocate Siddharth Dave represented VINP Sugars. Senior advocate Maninder Singh appeared for the Indian Sugar Mills & Bio-Energy Manufacturers Association.

 

The dispute has wider implications for ethanol producers participating in the government’s blending programme, particularly regarding the treatment of units with and without long-term offtake agreements.

 

The EBPP seeks to increase the blending of ethanol with petrol, with OMCs procuring ethanol from eligible producers through tenders.