Published Sep 30, 2026 | 3:07 PM ⚊ Updated Sep 30, 2026 | 3:07 PM
Representational image. Credit: iStock
Synopsis: The draft Petroleum (Amendment) Bill, 2026 proposes decriminalising minor licence violations while introducing graded penalties for serious offences. Unlicensed activities could attract fines of up to Rs 25 crore and imprisonment of up to three years. The draft also proposes civil penalties for licence breaches and tougher punishment for damage to petroleum infrastructure.
The Union Ministry of Petroleum and Natural Gas has published the draft Petroleum (Amendment) Bill, 2026 for suggestions from stakeholders and the public. The Bill seeks to amend the Petroleum Act, 1934, to decriminalise offences such as breaches of licence conditions while prescribing penalties for serious violations.
The draft Bill was published on Wednesday, September 30 and proposes amendments to Sections 23-25 of the Petroleum Act, 1934.
“The proposed amendments, inter alia, seek to achieve the objectives of decriminalisation of
regulatory issues such as breach of terms and conditions of licenses and provide for a
mechanism for imposition of civil penalty through an administrative mechanism. Further, the
proposed amendments provide adequate deterrence against specific offences relating to
various aspects of petroleum operations,” the ministry said.
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The draft Bill seeks to insert new provisions into Section 23 of the 1934 Act and prescribe penalties for specific offences while decriminalising regulatory issues such as breach of terms and conditions of licences.
The draft proposes a new provision, Section 23C, which provides for an administrative mechanism under which an adjudicating officer could impose a civil penalty of up to Rs 2.5 crore for the first breach of licence conditions and up to Rs 5 crore for subsequent breaches.
According to the proposed law, the adjudication officer can also direct the licence holder “to do or abstain from doing any act or thing to prevent such breach or for such compliance and make recommendations for the consideration of the licensing authority for further action
regarding suspension, revocation, or curtailment of the duration of such licence.”
The ministry, in the explanatory note, stated that the changes have been proposed to decriminalise minor offences while providing “adequate deterrence against specific
offences relating to different aspects of petroleum operations.”
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The draft Bill proposes to insert new provisions under Sections 23 and 25 while amending Section 24 of the Petroleum Act, 1934. The amendments propose specific penalties for serious violations of the Act, replacing the existing general offence provision.
According to the proposed amendments, carrying out an activity that requires 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. The draft also proposes imprisonment of up to five years or a fine of up to Rs 15 crore for a first offence involving damage to petroleum facilities, pilferage or actions endangering public safety.
For a second or subsequent offence, the imprisonment could extend to seven years, while the fine could go up to Rs 25 crore. Damage to critical petroleum infrastructure could attract imprisonment of up to 10 years and a fine of up to Rs 25 crore or the cost of the loss, destruction or damage, whichever is less.
The ministry has given stakeholders and the public 30 days, until October 30, to submit suggestions on the draft. The suggestions can be sent to sodist-png@gov.in, richa.86@nic.in.
(Compiled by Fayisa CA)
