Draft Petroleum Amendment Bill: Govt Proposes Decriminalising Routine Licence Breaches, Seeks Public Feedback

New Delhi, Oct 1 (KNN) The government has proposed decriminalising routine licence-related violations under the Petroleum Act, 1934, while introducing higher penalties for unauthorised operations, damage to petroleum facilities and other serious offences.

The Ministry of Petroleum and Natural Gas (MoPNG) on Wednesday released the draft Petroleum (Amendment) Bill, 2026, for public consultation, inviting comments until October 30.

Licence Breaches To Attract Civil Penalties

The draft proposes replacing the existing Section 23 with separate provisions for regulatory violations and serious offences.

Under proposed Section 23C, breaches of licence conditions would attract civil penalties of up to Rs 2.5 crore for the first violation and Rs 5 crore for subsequent breaches.

An adjudicating officer could also direct corrective action and recommend suspension, revocation or curtailment of the licence. The ministry said the provision would replace criminal proceedings for routine licence non-compliance with administrative adjudication.

Criminal Penalties For Serious Offences

Operating a petroleum activity requiring a licence without obtaining one could attract imprisonment of up to three years, a fine of up to Rs 25 crore, or both. Continuing violations could invite an additional fine of up to Rs 10 lakh per day.

Fraudulently obtaining a licence through misrepresentation, impersonation or other dishonest means could attract imprisonment of up to five years, a fine, or both.

Knowingly damaging petroleum facilities, pilfering petroleum or endangering public safety could attract imprisonment of up to five years or a fine of Rs 15 crore for a first offence. Subsequent offences could invite imprisonment of up to seven years or a fine of Rs 25 crore, or both.

The Centre could also notify petroleum production, import, storage, refining, transportation and blending facilities as critical infrastructure. Damage to such infrastructure could attract imprisonment of up to 10 years and a fine of up to Rs 25 crore or the cost of the damage, whichever is lower.

Existing Penalties Considered Outdated

The ministry said the offence framework has remained largely unchanged since 1970 and existing monetary penalties no longer reflect the scale of the petroleum sector.

It cited the rise in petrol prices from around Rs 0.90 per litre in 1970 to Rs 95-105 in 2026, while India's refining capacity expanded from 18.4 million tonnes per annum (MMTPA) across six refineries to over 258 MMTPA across 23 refineries.

The ministry also referred to higher penalties under the Oilfields (Regulation and Development) Act, 1948 and the Petroleum and Natural Gas Regulatory Board Act, 2006.

Other Proposed Changes

The Bill proposes penalties for obstructing authorised officers during inspections and failing to report petroleum-related accidents. Abetment, attempts and conspiracy to commit specified offences would also be punishable.

Amendments to Section 24 would expand confiscation provisions to cover facilities, works, equipment and materials used in offences. Changes to Section 25 would update court jurisdiction and provide for the application of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), to complaints, investigations and trials.

(KNN Bureau)