India Proposes Petroleum Act Amendments to Decriminalize Minor Offenses

The Ministry of Petroleum and Natural Gas of India has introduced the draft Petroleum (Amendment) Bill, 2026, to modernize the Petroleum Act of 1934. The proposal seeks to update a penalty framework that has not been substantially revised since 1970, which the ministry argues provides insufficient deterrence given the rise in petrol prices and the expansion of national refinery infrastructure.

The draft establishes a dual-track system for enforcement. Minor regulatory breaches, such as violating license terms and conditions, will be decriminalized and handled through an administrative mechanism. Adjudicating officers will be authorized to impose civil penalties up to Rs 5 crore for these infractions. This shift is intended to improve the ease of doing business and align the Act with modern legislation like the Telecommunications Act, 2023.

Conversely, the bill increases punishments for serious offenses to strengthen deterrence. Operating without a required license could lead to three years of imprisonment or fines up to Rs 25 crore. The most severe penalties are reserved for the theft of petroleum or damage to critical petroleum infrastructure, which may carry up to 10 years in prison and fines of Rs 25 crore. The government has opened the draft for public and industry consultation, with a deadline for comments set for October 30, 2026.