The government has proposed tougher penalties for unlicensed petroleum operations, including a fine of up to Rs 25 crore and imprisonment of up to three years, under the draft Petroleum (Amendment) Bill, 2026.
The draft legislation, released by the Ministry of Petroleum and Natural Gas on Wednesday, September 30, has been put out for stakeholder and public consultation.
According to the proposal, certain minor breaches of licence conditions may be decriminalised, with such violations instead attracting civil penalties. For specified violations, the draft proposes a Rs 2.5 crore penalty for a first breach, which could rise to Rs 5 crore for subsequent violations.
However, operating without the required licence would attract significantly stricter consequences. The draft proposes imprisonment of up to three years, or a fine of up to Rs 25 crore, or both, depending on the offence.
For more serious offences, the proposed punishment could extend to 10 years in prison and a fine of up to Rs 25 crore.
The proposed changes are aimed at revising the existing enforcement framework under the petroleum law, with a distinction between regulatory breaches and more serious violations.
The government has invited comments and suggestions from stakeholders and members of the public on the draft Bill until October 30, 2026. Inputs can be submitted to the Ministry of Petroleum and Natural Gas by post or email, according to the Press Information Bureau (PIB).
The proposals remain part of a draft legislation and could be modified following the consultation process.
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