India draft bill proposes Rs 25 crore fine

The Ministry of Petroleum and Natural Gas on Wednesday published a draft Petroleum (Amendment) Bill, 2026 that would decriminalise certain licence breaches and introduce a graded penalty framework including fines of up to Rs 25 crore for unlicensed activity. Reaction pending.

Penalties up to Rs 25 crore

Officials said the draft replaces a general offence in Section 23 of the Petroleum Act, 1934 with specific offences and penalties. Carrying out an activity that requires a licence without one could attract imprisonment of up to three years, a fine up to Rs 25 crore, or both; a continuing violation could add up to Rs 10 lakh per day. Fraudulent licence procurement could carry up to five years’ imprisonment, the draft said.

The proposal sets higher limits for offences that damage facilities, cause pilferage or endanger safety: first offences could draw up to five years and Rs 15 crore in fines, with repeat offences rising to seven years and Rs 25 crore. Damage to critical infrastructure could bring up to 10 years’ imprisonment and a fine capped at Rs 25 crore or the cost of damage, whichever is less.

Officials said the draft also creates an administrative route for licence breaches, allowing an adjudicating officer to impose civil penalties of up to Rs 2.5 crore for a first breach and up to Rs 5 crore for subsequent breaches, and to recommend suspension or revocation of licences.

Companies and industry participants should weigh higher administrative fines and faster enforcement against reduced criminal prosecutions for minor breaches. The ministry has invited public and industry comments by October 30, 2026.