The government has proposed decriminalising breaches of licence conditions in the petroleum sector. The draft Petroleum (Amendment) Bill, 2026 was released on September 30 for public comment.

Under the draft, an adjudicating officer could impose a civil penalty of up to Rs 2.5 crore for a first breach of licence terms, and up to Rs 5 crore for subsequent breaches. Comments are invited until October 30.

The changes replace the general offence clause under Section 23 of the Petroleum Act, 1934. Operating a licensable activity without a licence could still bring up to three years in jail or a fine of up to Rs 25 crore.

Fraudulent licence obtainment could attract up to five years in jail. Damage to petroleum facilities, pilferage or endangering safety could bring up to five years and a Rs 15 crore fine for a first offence, rising to seven years and Rs 25 crore for repeats.

Damage to critical petroleum infrastructure could mean up to 10 years in prison and a fine of up to Rs 25 crore. The 1934 Act’s penalty framework was last substantially amended in 1970.