The Karnataka High Court has directed oil marketing companies (OMCs) to review a request by Vinp Distilleries and Sugars Pvt Ltd for enhanced ethanol allocation and take a decision within four weeks, in a ruling that places focus on the application of contractual provisions in ethanol procurement.
Allowing a petition filed by the Haveri-based company, Justice M Nagaprasanna observed that Vinp Distilleries was entitled to seek consideration of its representation under the agreement signed with Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and Indian Oil Corporation Ltd, The New Indian Express reported.
The petition sought directions to the OMCs to examine the company’s representation dated October 27, 2025, which requested a higher allocation of ethanol supply.
In its order, the court noted that the OMCs had previously invoked Clause 6.8 of the agreement to increase procurement from 1.44 crore litres to 3.92 crore litres. The court observed that the same provision could not be selectively applied while declining the company’s request for allocation of 9.90 crore litres.
Justice Nagaprasanna stated that selective application of the clause would effectively make its operation dependent on the discretion of the OMCs, which would not align with legal principles.
According to the petition, Vinp Distilleries was established specifically to supply ethanol to OMCs. In August 2021, the companies issued a tender to enter into long-term offtake agreements with dedicated ethanol production facilities located in ethanol-deficit states, with bid opening taking place the following month.
Later, in March 2023, the OMCs invited a second round of expressions of interest for signing additional long-term offtake agreements in selected states.
Subsequently, in September 2025, OMCs floated a tender for procurement of 1,050 crore litres of denatured anhydrous ethanol for the ethanol supply year 2025–26.
Vinp Distilleries stated that it was informed through an email dated October 17, 2025, that it had been allotted only 3.92 crore litres against its bid allocation of 9.26 crore litres, prompting the legal challenge.
The High Court’s direction now requires the OMCs to reconsider the representation and take a decision within the stipulated four-week period.
