Archive · 2 Oct 2026
Government Proposes Civil Penalties for Petroleum Licence Breaches
The government wants to change how some petroleum-law violations are punished.
Small or routine licence problems would usually be handled with civil fines instead of criminal cases.
An official could impose fines of up to Rs 2.5 crore for a first breach and Rs 5 crore for later breaches.
Licence holders could also be ordered to fix a problem or change their actions.
Serious dangers would still be treated as crimes.
These include unauthorised petroleum work, damage to important facilities, theft and risks to people’s safety.
Some serious offences could lead to imprisonment of up to 10 years.
The government says the old penalties are outdated because the law was last amended in 1970.
People and businesses can send comments on the proposed changes within 30 days.
The government has proposed replacing criminal action for routine petroleum licence breaches with civil penalties.
Administrative adjudicators could impose up to Rs 2.5 crore for a first breach and Rs 5 crore for later breaches.
Criminal penalties would remain for unauthorised operations, public-safety risks, infrastructure damage and other serious offences.
Unauthorised petroleum activity could bring up to three years’ imprisonment and a fine of up to Rs 25 crore.
The Ministry of Petroleum and Natural Gas has invited public and industry comments within 30 days.
- Who
- The Ministry of Petroleum and Natural Gas and the central government proposed the amendments.
- What
- The draft would decriminalise routine petroleum licence breaches, create civil penalties and increase punishments for serious offences.
- When
- The ministry invited comments within 30 days of publication of the notice; the Petroleum Act was last amended in 1970.
- Where
- The proposals concern petroleum operations governed by the Petroleum Act, 1934.
- Why
- The government says the changes would modernise outdated penalties, reduce criminalisation of regulatory matters, improve ease of doing business and deter serious offences.
- First licence breach
- A civil penalty of up to Rs 2.5 crore could apply.
- Repeat licence breach
- A civil penalty of up to Rs 5 crore could apply.
- Unauthorised petroleum activity
- Up to three years’ imprisonment, a fine of up to Rs 25 crore, or both.
- Critical infrastructure damage
- Up to 10 years’ imprisonment and a fine of up to Rs 25 crore or the cost of damage, whichever is less.
- Serious facility offences
- Damaging facilities, pilfering petroleum or endangering safety could attract up to five years’ imprisonment or a fine of up to Rs 15 crore for a first offence.
- Repeat serious facility offences
- A second or subsequent offence could attract up to seven years’ imprisonment or a fine of up to Rs 25 crore.
- Public consultation
- Comments and suggestions are invited from the public and industry within 30 days.