The Ministry of Petroleum and Natural Gas has released the draft Petroleum (Amendment) Bill, 2026, for public consultation, proposing changes to the legal framework governing petroleum-sector violations.
The proposed amendments aim to remove criminal penalties for minor regulatory breaches related to the import, transport, storage, production, refining and blending of petroleum products.
The ministry said the current provisions under Section 23 of the Petroleum Act, 1934, create a broad offence framework where violations of licence conditions are treated as criminal matters.
The proposed changes seek to replace this approach with an administrative mechanism involving civil penalties.
Proposed changes to petroleum law framework
The draft bill proposes amendments to Chapter III of the Petroleum Act, which deals with penalties and procedures. It seeks to replace Sections 23 and 25, introduce new Sections 23A to 23E, and modify Section 24.
According to the ministry, the objective is to distinguish between regulatory violations and serious offences.
While breaches such as non-compliance with licence conditions would attract civil penalties, offences that threaten the safety and integrity of petroleum operations would continue to face stricter action.
The Petroleum Act, enacted in 1934, has remained largely unchanged for decades, with the last major amendment taking place in 1970. The government noted that penalties prescribed at that time have lost relevance due to significant economic changes.
The ministry highlighted that the fine structure introduced in 1970, when petrol prices were below ₹1 per litre, is no longer adequate given current fuel prices and the expansion of petroleum infrastructure, including critical assets such as refineries.
New offences and global references
The proposed amendments aim to establish specific offences covering different areas of petroleum operations while ensuring that enforcement remains effective.
The ministry said the revised framework would provide stronger deterrence against serious violations while preventing routine regulatory issues from becoming criminal cases.
The proposed provisions have been developed after examining existing Indian laws and international practices in countries including the US, Japan, Australia, Germany and Singapore.
The government said the amendments are intended to modernise petroleum-sector regulation, improve ease of doing business and maintain safety standards across critical energy infrastructure.
