The Ministry of Petroleum and Natural Gas (MoPNG) on Wednesday floated the draft Petroleum (Amendment) Bill, 2026, for stakeholder consultation, proposing to decriminalise minor offences related to the import, transport, storage, production, refining and blending of petroleum products.
“The objective of the amendments proposed is to rationalize the otherwise generic offence presently under section 23 of Petroleum Act, 1934, which fails to achieve any specific deterrence against the specific offences but has created a framework whereby breaches of licenses become criminal offences,” the ministry said.
The amendment is part of a broader government effort to strengthen the existing legal framework governing offences committed in violation of the Petroleum Act, 1934.
The draft legislation seeks to amend Chapter III of the Act relating to “Penalties and Procedure” by substituting Sections 23 and 25, inserting new Sections 23A, 23B, 23C, 23D and 23E, and amending Section 24.
“The proposed amendments, inter alia, seek to achieve the objectives of de-criminalization of regulatory issues such as breach of terms and conditions of licenses and provides for a mechanism for imposition of civil penalty through an administrative mechanism,” the ministry said.
It added that the proposed amendments would provide adequate deterrence against specific offences relating to various aspects of petroleum operations.
The Petroleum Act, 1934, established the framework for offences that has remained largely unchanged. It was last amended in 1970 through the Petroleum (Amendment) Act, 1970.
That amendment raised the fine under Section 23 from ₹500 to simple imprisonment of up to one month or a fine of ₹ 1,000. For repeat offences, the earlier penalty of up to ₹2,000 was replaced with simple imprisonment of up to three months or a fine of up to ₹5,000, or both.
“The penalty, although significant in 1970s, is now insignificant, considering that in 1970, the price of petrol was ₹0.90 per litre and in 2026 it fluctuates between ₹95 and ₹105, which is an increase of over 10,000 percent. Even the critical infrastructure that is integral to national security, such as oil refineries, has increased manifold,” the ministry said.
The proposed framework also creates specific offences relating to different aspects of the Petroleum Act, 1934.
The ministry said the intent was to ensure that regulatory breaches, such as violations of licence conditions, were not treated as criminal offences, while retaining adequate deterrence against serious offences relating to petroleum operations.
The ministry said the specific offences being created were critical to maintaining the integrity of petroleum-sector operations.
The proposed provisions have been framed with reference to other relevant statutes in force in India as well as international precedents from jurisdictions including the US, Japan, Australia, Germany and Singapore.
