Petroleum Amendment Bill 2026 Proposes Decriminalising Minor Offences, Introduces Civil Penalties For Licence Violations

The Ministry of Petroleum and Natural Gas has unveiled the draft Petroleum (Amendment) Bill, 2026, inviting public input on proposed changes to the legal framework governing violations within the petroleum sector. The amendments seek to eliminate criminal penalties for minor regulatory breaches related to the import, transportation, storage, production, refining, and blending of petroleum products.

Currently, Section 23 of the Petroleum Act, 1934, outlines a broad offence framework, treating violations of licence conditions as criminal matters. The bill's objective is to replace this approach with an administrative mechanism relying on civil penalties instead.

The draft bill proposes amendments to Chapter III of the Petroleum Act, specifically targeting Sections 23 and 25, introducing new Sections 23A to 23E, and modifying Section 24. The Ministry's goal is to differentiate between regulatory violations and serious offences. While infractions like non-compliance with licence conditions would incur civil penalties, offences posing threats to the safety and integrity of petroleum operations would still face more stringent action.

The Petroleum Act, established in 1934, remains largely unchanged since its enactment, with the last major amendment occurring in 1970. Government officials noted that the penalties prescribed during that time have become obsolete due to significant economic changes. The proposed amendments aim to establish specific offences covering various aspects of petroleum operations, ensuring effective enforcement.

The new provisions draw upon existing Indian laws and international practices from countries such as the US, Japan, Australia, Germany, and Singapore. The government seeks to modernise petroleum-sector regulation, enhance ease of doing business, and maintain safety standards across vital energy infrastructure.