Karnataka Minister Blames Centre for Ethanol Blending Impasse

During a press conference in Bengaluru, the Karnataka Industries Minister asserted that the central government’s reluctance to approve additional ethanol blending quotas was jeopardising the livelihoods of thousands of sugarcane farmers who depend on the scheme for a reliable market. He cited recent data indicating a surplus of molasses and a corresponding shortfall in blending capacity, which he claimed could be remedied by a swift policy revision. The minister’s remarks were directed at the Ministry of Petroleum and Natural Gas, urging it to heed the concerns of regional stakeholders and to engage directly with industry leaders such as Murugesh Nirani and Prabhakar Kore.

The controversy arrives at a critical juncture for India’s energy transition, as the government seeks to reduce oil imports by mandating a higher ethanol blend in gasoline. Karnataka, a major sugarcane‑producing state, has positioned itself as a potential hub for ethanol production, promising to supply both domestic demand and export markets. However, the lack of a clear, binding framework from the centre has stalled investments in new distilleries and has left existing facilities operating below capacity. Analysts warn that prolonged uncertainty could erode investor confidence, prompting capital to flow toward states with more decisive policy environments.

Political ramifications are already evident, with opposition parties in the state leveraging the minister’s statements to criticize the central leadership’s handling of agrarian distress. The federal‑state clash may also influence upcoming legislative discussions on the Renewable Energy Sources Act, where amendments to the blending mandate are expected. Over the next twelve months, the standoff could catalyse a restructuring of the ethanol supply chain, potentially leading to a more decentralized model that grants greater autonomy to high‑production states.