Petroleum Act draft decriminalises licence breaches, ups fines

The Ministry of Petroleum and Natural Gas on 30 September released the draft Petroleum (Amendment) Bill, 2026, proposing to decriminalise breaches of licence terms under the Petroleum Act, 1934. Under the proposed Section 23C, an adjudicating officer could impose a civil penalty of up to Rs 2.5 crore for a first breach and up to Rs 5 crore for a second or subsequent breach, Livemint, The Hindu Businessline and Morung Express report.

Unlicensed petroleum activity could attract imprisonment of up to three years and a fine of up to Rs 25 crore. Fraudulently obtaining a licence through misrepresentation could bring up to five years in prison, Morung Express and Economic Times add. Damage to critical petroleum infrastructure could draw up to 10 years in prison and a fine of up to Rs 25 crore. The existing penalty framework was last amended in 1970, when petrol cost around Rs 0.90 per litre versus Rs 95 to 105 now. The draft is open for stakeholder comments until 30 October 2026.

Update, 3 October 2026: Economic Times on 2 October adds that the ministry cited the Telecommunications Act, 2023, as a model for the civil-penalty regime, and said the new offences draw on precedents from the US, Japan, Australia, Germany and Singapore. The outlet also confirms the same penalty ranges for licence breaches and unlicensed activity as previously reported, and notes the government's argument that the change would improve ease of doing business.