"We Will Try To Give Fair And Equal Allocation": Centre Tells Supreme Court In Ethanol Allocation Row
While assuring the Supreme Court that the government was attempting to evolve a fair solution for Dedicated Ethanol Plants (DEPs), Attorney General R. Venkataramani, appearing for Bharat Petroleum Corporation Ltd. (BPCL) and other oil marketing companies (OMCs), said, "We will try to give fair and equal allocation."
The court on Thursday posted for hearing on July 29 a batch of matters concerning ethanol allocation for Dedicated Ethanol Plants for the Ethanol Supply Year (ESY) 2025–26.
A bench of Justices M.M. Sundresh and Prasanna B. Varale directed the completion of service of notices in the connected transfer petitions and appeals before listing the matters for hearing on July 29.
The bench also acknowledged the request made by counsel appearing for the Dedicated Ethanol Plants that the Attorney General use his "good offices" to convene a meeting with senior officials to explore a practical resolution.
Attorney General R. Venkataramani submitted that any decision in favour of one Dedicated Ethanol Plant would inevitably affect the others.
Referring to the practical difficulties in the allocation process, he questioned how additional allocations could be made when "there are competing claimants and there is a limited offtake."
He pointed out that if the shortfall were redistributed, the authorities would have to decide "whom should I favour?", adding that every supplier would stake a similar claim.
Assuring the bench that the Government was working towards a balanced solution, the Attorney General submitted that there was "no intent to discriminate or pick and choose."
He informed the court that "at the highest level we are trying to find out which will be the best solution." He added that he would ask the oil marketing companies to "try to give fair and equal allocation."
Appearing for the Dedicated Ethanol Plants, senior counsel submitted that the manufacturers had set up plants exclusively to supply ethanol to OMCs under long-term offtake agreements.
They had made substantial investments on that basis. Requesting the Attorney General to use his good offices to facilitate a resolution, counsel urged:
"Let the learned Attorney General hold a meeting. He has to have a meeting with the officers at the highest level and try to figure it out."
The bench acknowledged the competing commercial interests involved. It observed that an administrative solution could be explored in parallel with the adjudication of the legal issues.
Background
The dispute arose after VINP Distilleries challenged the allocation of ethanol for Ethanol Supply Year (ESY) 2025-26 seeking enhancement of its allocation under a long-term ethanol procurement agreement with Bharat Petroleum Corporation Ltd. (BPCL). The Karnataka High Court directed the Oil Marketing Companies (OMCs) to consider and decide the company's representation before finalising the tender.
Challenging the order, Attorney General R. Venkataramani, appearing for BPCL on June 30, submitted before the Supreme Court that nearly 75 similarly placed suppliers had approached different High Courts and allowing such directions to operate would disrupt the nationwide ethanol allocation process. He argued that the High Court had effectively granted a mandatory interim injunction, despite the agreement requiring procurement only on a best-efforts basis and not conferring any enforceable right to a particular allocation.
Appearing for the ethanol supplier, counsel submitted that the company had established its plant exclusively to supply ethanol to BPCL had invested substantial sums under the agreement, and remained entitled to lifting worth around ₹200 crore. It was argued that the company could not be denied allocation during the subsistence of the procurement arrangement.
Issuing notice, a vacation bench of Justices M.M. Sundresh and Sheel Nagu directed that status quo be maintained and ordered that VINP Distilleries' representation shall not be decided until the next date of hearing.