In 2025, more than 1 in 4 medium-scale chemical storage facilities inspected across industrial clusters were issued compliance notices for layout deviations or licence renewal gaps. In one case, a 30 KL petroleum storage yard in Gujarat lost 42 operational days because the approved drawing under Rule 144 of the Petroleum Rules, 2002 did not match the actual tank foundation.
For manufacturers, importers, gas filling plants, LPG bottlers, solvent warehouses, and industrial units, a PESO Licence in India is not just paperwork. It directly impacts commissioning timelines, insurance validity, fire safety approvals, and environmental compliance exposure.
This guide explains the law, rule numbers, timelines, capacity triggers, and penalties in practical business terms.
PESO (Petroleum and Explosives Safety Organisation) operates under DPIIT and enforces a structured safety regime that traces back over 100 years. The regulatory framework is not advisory — it is mandatory.
Under Section 9B of the Petroleum Act, imprisonment may extend up to 2 years for violations. Under Section 15 of the Environment Protection Act, imprisonment may extend to 5 years along with daily monetary penalties for continuing offences.
For a business operating with ₹5 crore to ₹200 crore plant investment, regulatory exposure under these sections is financially and operationally significant.
The licence category depends on the material stored, flash point classification, pressure system type, and storage capacity.
This is the most common rule set applicable to diesel, petrol, solvents, and petroleum products.
Key provisions:
Typical compliance triggers:
A 20 KL storage unit and a 75 KL storage unit are regulated very differently in terms of dyke design, safety distance, and fire system redundancy.
Applicable to LPG, LNG, CNG, cryogenic storage tanks and pressure vessels.
Validity generally ranges between 3 to 5 years.
For example, an LPG bottling plant with 100 MT storage capacity requires detailed site clearance, fire water reservoir calculation, and explosion safety clearance.
Applicable to industrial gas filling and storage facilities.
A plant filling 1,000 cylinders per day faces different compliance scrutiny than a plant filling 100 cylinders per day.
Mining, fertilizer, and chemical intermediates industries commonly fall under this category.
PESO licensing applies to more than 15 industrial categories:
Even small industrial estates storing 5 KL to 10 KL diesel backup tanks are frequently required to obtain licence approval.
| Regulation | Key Requirement | Deadline | Applicable To | Risk if Ignored |
|---|---|---|---|---|
| Petroleum Rules 2002 – Rule 144 | Licence before storage | Before installation | Petroleum storage units | Sealing & suspension |
| SMPV Rules 2016 – Rule 18 | Approval before commissioning | Before operations | LPG/LNG/CNG units | Plant shutdown |
| Gas Cylinders Rules 2016 – Rule 43 | Filling licence mandatory | Before filling | Gas plants | Cylinder seizure |
| Ammonium Nitrate Rules 2012 – Rule 14 | Storage licence >5 MT | Before procurement | Mining/fertilizer | Criminal liability |
| EPA 1986 – Section 15 | Environmental compliance | Ongoing | All hazardous units | Fine + imprisonment |
Interpretation: PESO licence does not replace Consent to Establish or Fire NOC. It complements them.
PESO approval involves engineering validation, not just documentation submission.
Timeline: 30–60 working days for scrutiny.
More than 30% of first-time applicants receive queries for spacing corrections.
Applicant must respond within 7–15 working days.
Common queries:
Failure to respond within stipulated time may result in application closure.
Inspection typically scheduled within 15–30 days after drawing approval.
Inspection checklist may include:
Even minor deviations may delay licence grant by 15–45 days.
Licence validity:
Renewal should be applied at least 30 days before expiry.
A medium-size 50 KL storage facility typically requires:
For large installations (>100 KL), redundancy in fire water pumps and emergency power supply is commonly required.
| Storage Capacity | Risk Category | Scrutiny Level |
|---|---|---|
| <5 KL | Moderate | Periodic inspection |
| 5–50 KL | High | Annual inspection |
| >50 KL | Very High | Strict monitoring |
| LPG >100 MT | Critical | Intensive regulatory review |
The higher the capacity, the more detailed the compliance evaluation.
Licence may be suspended if:
In recent enforcement patterns:
A 65 KL petroleum storage unit expanded from 40 KL without submitting revised drawings. During inspection, licence was suspended for 52 days. The company faced ₹2.3 crore operational loss, plus rework expense of approximately ₹18 lakh for layout correction.
Non-compliance may result in:
Financial exposure can easily cross ₹50 lakh to ₹5 crore depending on plant size and shutdown duration.
Early planning:
Most delays occur due to layout errors — not because of rule complexity.
A PESO Licence in India is a statutory engineering approval that directly impacts safety, environmental liability, insurance validity, and plant continuity.
Whether you operate a 5 KL diesel storage yard or a 100 MT LPG bottling facility, compliance must be rule-based, drawing-backed, and inspection-ready.
The cost of non-compliance is significantly higher than structured documentation and timely licensing.
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