The Petroleum Rules, 2002

Rule 3Restrictions on Delivering and Dispatching Petroleum

1. Who Can Receive Petroleum:
   1. No one is allowed to deliver or send petroleum to anyone in India. It can only be delivered to:
      • The holder of a storage licence or their authorized agent.
      • A port authority or railway administration.
      • A person authorised by law to store petroleum without a licence.
2. Amount and Type of Petroleum:
   1. When delivering or sending petroleum, the type and quantity must match what the recipient is allowed to store under their licence (or without a licence).
3. Special Rule for Petroleum Class B:
   1. Petroleum Class B can be sent to someone without a storage licence, but only up to 15,000 litres if it's in sealed airtight approved containers.
   2. The person sending it must ensure the recipient has arranged to dispose of the petroleum immediately, especially for amounts over 2,500 litres.
   3. If the shipment exceeds 2,500 litres, a dry chemical fire extinguisher must also be included.
4. Exceptions:
   1. These rules do not apply to deliveries made to:
      • The Defence Forces of India.
      • The delivery of kerosene (Petroleum Class B) to someone who holds a special licence for decantation.
   2. For kerosene, the person delivering it must ensure the recipient can immediately transfer the kerosene into containers of 2,500 litres or less.

This rule helps regulate how petroleum is handled, ensuring safety and compliance with licensing requirements.

Rule 4Approval of Containers

1. Container Requirements:
   • Containers holding more than 1 litre of Petroleum Class A or more than 5 litres of Petroleum Class B or C must be approved by the Chief Controller of Explosives.
2. Application for Approval:
   • To use a new type of container, applicants must:
     • Submit an application with scale drawings of the container design.
     • Include details about materials, construction method, and capacity.
     • Provide two sample containers and pay a fee of ₹1,000 for review.
3. Exceptions:
   • These approval rules do not apply to containers owned by the Defence Forces of India.

Rule 5Containers for Petroleum Class A

1. Materials for Containers:
   1. Must be made of tinned, galvanized, or rust-proofed sheet iron or steel, approved by the Chief Controller.
   2. Glass bottles (≤ 2.5 litres) may be used for laboratory chemicals classified as Class A, if approved.
2. Container Durability:
   1. Containers must not become defective, leaky, or insecure during transit unless due to gross negligence or extraordinary accident.
   2. Containers should be kept in good repair at all times.
3. Filling Apertures:
   1. Containers should have a well-made filling opening tightly secured with airtight screw plugs, screw caps, or other reliable caps.
4. Container Metal Thickness:
   1. Required minimum metal thickness by capacity:
      • Up to 10 litres: 0.443 mm (27 BG)
      • 10 to 25 litres: 0.63 mm (24 BG)
      • 25 to 50 litres: 0.80 mm (22 BG)
      • 50 to 200 litres: 1.25 mm (18 BG)
      • 200 to 300 litres: 1.59 mm (16 BG)
5. Maximum Capacity:
   1. Containers should not exceed 300 litres unless specifically approved by the Chief Controller.
6. Air Space:
   1. Each container must have an air space of at least 5% of its total capacity.
7. Warning Labels:
   1. Every container must carry a clear warning label in large letters — "Petrol" or "Motor Spirit" or equivalent — indicating the contents are highly inflammable.
8. Exceptions:
   1. Rules for materials, thickness, capacity, air space, and warning labels do not apply to containers owned by the Defence Forces.

Rule 6Containers for Petroleum Class B and Class C

1. Container Materials:
   1. Must be made of steel or iron and approved by the Chief Controller.
2. Air Space Requirement:
   1. Class B containers must have at least 5% air space.
   2. Class C containers must have at least 3% air space.
3. Exceptions:
   1. These rules do not apply to containers owned by the Defence Forces of India.

Rule 7Empty Receptacles

• Empty tanks or containers that previously held Petroleum Class A or Class B must be securely closed unless being opened for cleaning or filling.
• These containers must be thoroughly cleaned and freed from petroleum vapour before being reused or disposed of.

Rule 8Repairs to Receptacles

1. Repairs by Hot Work:
   • No tank or container that has contained petroleum should be repaired using hot work (welding, cutting, etc.) unless:
     • The container has been thoroughly cleaned and is free of petroleum and petroleum vapour.
     • It has been certified in writing by a competent person as safe for such repair work.
2. Certificate for Repairs:
   • The repair certificate must be kept by the repairer for at least three months and shown to an inspector if requested.

Rule 9Prevention of Escape of Petroleum

• Precautions must always be taken to prevent petroleum from escaping into:
  • Drains, sewers, harbours, rivers, or watercourses.
  • Public roads, railway lines, or any other place where petroleum could cause a hazard.

Rule 10Prohibition of Employment of Children and Intoxicated Persons

• Children under 18 and intoxicated persons are not allowed to be employed in:
  • Loading, unloading, or transporting petroleum.
  • Working in any premises licensed under these rules.

Rule 11Prohibition of Smoking, Fires, and Lights

• Smoking, matches, or anything that could cause ignition is strictly prohibited near places where petroleum is:
  • Refined, stored, or handled.
  • Transported in a vehicle or vessel.

Rule 12Special Precautions Against Accidents

1. Prevention of Fire or Explosion:
   • No one should do anything that could cause a fire or explosion where petroleum is refined, stored, handled, or transported.
2. Responsibilities of Petroleum Handlers:
   • Everyone who stores, handles, or transports petroleum must follow the rules and licence conditions, take all precautions to prevent accidents, and ensure no one commits any act that could cause such accidents.

Rule 13Payment of Fees

1. Fees to the Chief Controller must be paid through a crossed bank draft drawn in favour of the Chief Controller of Explosives, Nagpur, payable at Nagpur. Fees up to ₹100 may be paid in cash at his office.
2. Fees to a Controller (other than the Chief Controller) must be via a crossed bank draft drawn in favour of that Controller, payable at their station. Fees up to ₹100 may be paid in cash.
3. Fees to District Authorities should be paid in the manner specified by the respective authority.
4. Refund of Fees: If an application for a licence is rejected, fees will be refunded — generally within six months of payment.
5. Non-refundable Fees: Fees paid for purposes other than the grant, renewal, or amendment of a licence are non-refundable.

Rule 14Licence for Import of Petroleum

• Petroleum (except types storable without a licence under sections 7, 8, and 9 of the Act) cannot be imported into India without a licence under these rules.
• Exception: Petroleum products may be imported without a licence if proper arrangements for licensed storage have already been made.

Rule 15Petroleum Exempted

1. Ship's Stores: Rules do not apply to Petroleum Class B or C that is part of a ship's stores and is manifested as such.
2. Defence Forces: Rules in Sections 14, 19, and 26 do not apply to petroleum imported by the Defence Forces of the Union.

Rule 25Petroleum to be Imported by Land Only at Authorized Places

• No petroleum shall be imported into India by land unless it is brought through places specifically authorized for this purpose by the Central Government.

Rule 26Declaration, Certificate, and Licence for Importing Petroleum by Land

• Anyone importing petroleum by land must provide the Commissioner of Customs with:
  1. A declaration in Form I, signed by the person or their agent.
  2. A certificate of storage accommodation in Form II.
  3. The licence or an authenticated copy of the licence for importation and storage.
• Exemptions: These rules do not apply to petroleum exempt under sections 7, 8, and 9 of the Act, or to Petroleum Class C imported in bulk in exempt quantities.

Rule 27Permission of the Commissioner of Customs to Unload Petroleum

1. Unloading Permission: Petroleum cannot be unloaded without permission from the Commissioner of Customs.
2. Conditions for Unloading: The Commissioner will review the testing officer's report, storage certificate (Form II), and import licence before granting permission.
3. Exemption for Immediate Export: If the Commissioner is satisfied that petroleum is intended for immediate export, the requirements of rules 14 and 26 may be waived.
4. Other Powers: This rule does not affect the Commissioner of Customs' power to detain petroleum under other laws.

Rule 28 — Restriction on Leaky Receptacles

• No leaky tank or container that contains petroleum is allowed to be tendered for transport.

Rule 29 — Loading of Containers

• Barrels, drums, and other containers filled with petroleum must be loaded with the bung (cap) facing upwards.

Rule 30 — Restriction on Passengers, Combustible and Inflammable Cargo

• Except as specified in rules 38, 39, and 52, no ship, vessel, or vehicle should carry petroleum Class A, B, or C in bulk if also carrying passengers or combustible cargo other than petroleum.
• Exception: Use of dunnage in coastwise transport of petroleum Class A (not in bulk) is permitted.

Rule 31 — Prohibition of Smoking, Fires, Lights

• No person involved in loading, unloading, or transporting petroleum is allowed to smoke or carry matches, lighters, or any appliance capable of producing ignition or explosion.

Rule 32 — Restriction on Loading and Unloading by Night

• Petroleum should not be loaded or unloaded between sunset and sunrise, unless:
  • (a) Adequate electric lighting is provided and all provisions in Chapter IV are followed.
  • (b) Adequate fire-fighting facilities and personnel are ready at the loading area.
• This rule does not apply to refuelling of aircraft under Indian Aircraft Rules, 1937, or to refuelling by the Defence Forces.

Rule 62 — Application

This part applies to the transport of petroleum on land by vehicles, but exemptions apply for:

• Petroleum Class A in quantities of 100 litres or less.
• Petroleum of any class transported other than in bulk (subject to rule 67).
• Petroleum transported by the Defence Forces of the Union.

Rule 63 — Tank Vehicles

1. Every tank vehicle for transporting petroleum in bulk must be built, tested, and maintained per the Third Schedule and approved by the Chief Controller.
2. Tanks must be fabricated by an approved manufacturer who submits drawings in quadruplicate with a scrutiny fee of ₹100. Approval is valid for 3 years, renewable for another 3 years with a fee of ₹500. Manufacturer approval requires a fee of ₹500.
3. These rules do not apply to tank wagons used for transporting petroleum by rail.

Rule 64 — Tank Capacity

1. Net Carrying Capacity:
   • 97% of gross capacity for Petroleum Class A and Class B.
   • 98% of gross capacity for Petroleum Class C.
2. Capacity Limits:
   • Tank trucks or semi-trailers: up to 25 kilolitres (aircraft refuellers up to 50 kilolitres).
   • Tank trailers: up to 5 kilolitres.
3. Weight Limits: Maximum safe weight of petroleum = maximum gross weight − unladen weight, as per transport regulations.

Rule 65 — Restriction on Other Use

• A tank vehicle meant for transporting petroleum in bulk cannot be used for any other purpose unless explicitly authorized in writing by the Chief Controller.

Rule 66 — Trailers

1. A tank trailer not exclusively used for transporting petroleum cannot be attached to any vehicle for petroleum transport. Only one trailer can be attached at a time.
2. A tank trailer or tank semi-trailer must have reliable brakes operable from the driver's seat.
3. The trailer's width must be less than the overall width of the towing vehicle.
4. If a tank trailer carrying Class A is attached to a vehicle carrying Class B or C, the towing vehicle must meet Class A requirements.
5. When a tank trailer is attached to a tank truck, the total petroleum cannot exceed 15 kilolitres. A tank trailer cannot be attached to a tank truck with a net capacity greater than 12 kilolitres.
6. No tank trailer can be used in thickly populated areas without written permission from the district authority.

Rule 67 — Vehicle for Transport Otherwise than in Bulk

1. Every vehicle used to transport petroleum other than in bulk must be strongly constructed with adequate sides and back. (Animal-drawn vehicles are exempt if load is securely fastened.)
2. Containers must not project beyond the sides or back of the vehicle.
3. Petroleum Class A cannot be transported in trailers attached to any vehicle.

Rule 68 — Composite Vehicles

• Petroleum in cans or containers cannot be transported on a tank vehicle unless the vehicle complies with both the rules for bulk transport and non-bulk transport.

Rule 69 — Carriage of Other Articles Prohibited

• No vehicle transporting petroleum can carry any other article at the same time, unless explicitly authorized in writing by the Chief Controller.

Rule 70 — Engines of Mechanically Propelled Vehicles

1. Vehicles for transporting petroleum (except Class B and C not in bulk) must have:
   • Diesel engines or internal combustion engines.
   • Exhaust systems positioned in front of the tank/load, clear of fuel systems, fitted with an approved spark arrestor.
   • Air intake systems with effective flame arresters.
   • All-metal vehicle cab with wired glass windows, or a fire-resisting shield between cab/engine and the tank.
2. If the fuel tank is installed behind the vehicle cab, it must be protected by steel guards and have a locked filling cap.
3. Vehicles running on Petroleum Class A must have a quick-action cut-off valve on the fuel feed pipe, clearly marked.
4. Engine requirements (except exhaust/spark arrestor) do not apply to helicopters/airplanes used exclusively for aerial crop-spraying with Class A.

Rule 71 — Electrical Installation

1. Voltage Limit: Electric circuit pressure must not exceed 24 volts.
2. Wiring must be heavily insulated with fuses or automatic circuit breakers; junction boxes must be sealed.
3. Electrical components (generator, battery, switches, fuses) must be located in the vehicle's cab or engine compartment.
4. Any generators, motors, or switches outside the engine compartment must be of the approved flame-proof type.
5. Exceptions: Rules do not apply to transport of Class A for helicopters/airplanes for aerial crop spraying (not in bulk).

Rule 72 — Means of Extinguishing Fire

1. A 10 kg dry chemical powder fire extinguisher (or equivalent) must be easily accessible on the vehicle.
2. A 1 kg dry chemical powder fire extinguisher must be kept in the driver's cabin.

Rule 73 — Vehicles to be Constantly Attended

1. At least one person familiar with petroleum transport safety rules must always attend the vehicle.
2. Empty tanks still containing petroleum vapours may be left unattended at locations approved in writing by the Chief Controller.
3. For vehicles carrying more than 5 kilolitres of petroleum (other than Class C), or vehicles being trailed, two persons must attend the vehicle while in motion.

Rule 74 — Prohibition on Parking

• Vehicles transporting petroleum must not park:
  1. On any public road or in congested areas.
  2. Within 9 metres of any source of fire.

Rule 116 — Licence for Storage

• You cannot store petroleum without a licence, unless it is petroleum stored in well-head tanks or as transit cargo in a port with port authority approval.

Rule 117 — Fire Safety

1. No smoking in any storage area or service station unless specifically allowed by the licensing authority.
2. Do not carry matches, fuses, or anything that could cause a fire or explosion in storage areas.
3. No open flames or heat sources in storage areas unless authorized.
4. Fire Extinguishers:
   1. Keep sufficient fire extinguishers at key points in storage areas.
   2. All workers should know how to use the fire extinguishers.
   3. Follow fire-fighting requirements in OISD Standard-117.

Rule 118 — Supervision of Operations

• All work in storage or service areas must be supervised by someone experienced and knowledgeable about the rules, safety standards, and who has proper safety training.

Rule 119 — Cleanliness

• The ground inside and around the storage or service station must be kept clean and free from plants, waste, or rubbish.

Rule 120 — Drainage

1. There must be good drainage around tanks so that water does not collect.
2. Walls or enclosures around tanks must not be below the surrounding ground level.
3. If there is a drainage pipe, it must have a valve operable from outside the enclosure.
4. Valves and openings for drainage should be closed when not in use.
5. The drainage system must be shown in the plan submitted when applying for a licence.

Rule 121 — Preventing Unauthorized Access

1. The area around every storage installation must be enclosed by a wall or fence at least 1.8 metres high.
2. For service stations, the fence on all sides (except vehicle entry) must be at least 1.2 metres high.
3. Steps must be taken to prevent unauthorized entry.

Rule 122 — Storage of Petroleum Only

• You cannot use an installation, service station, or storage shed for anything other than storing and distributing petroleum without written permission from the Chief Controller.

Rule 123 — Tank Capacity Marking

• The capacity (in litres or kilolitres) of every above-ground tank must be clearly marked on the tank.

Rule 124 — Construction of Tanks

1. Tanks must be made of iron or steel following ISI standards or another approved code, on non-combustible foundations.
2. Tank height must not exceed 1.5 times its diameter, or 20 metres — whichever is less.
3. There must be an air space of at least 5% of the tank's total capacity.

Rule 125 — Protection Against Corrosion

• Tanks installed on or below the ground must be protected against corrosion using special coatings, cathodic protection, or other approved methods.

Rule 126 — Testing of Tanks

1. After installation, re-installation, or repair, a storage tank must be tested for leaks using water pressure by a qualified person.
2. The water used for the test must not contain any petroleum.
3. The testing person must issue a certificate confirming the test results, to be submitted to the licensing authority.

Rule 141 — Grant of Licence

• Licences under these rules are granted by the authorities listed in the First Schedule, using the specified forms and fees.

Rule 142 — Duration of Licences

1. Licences for Form III or Form XVII can be granted for up to one year.
2. Other licences are generally granted up to 31st December of the year they are issued, with a maximum duration of three years.
3. For specific works or short-term events (like festivals), the licensing authority can issue a licence for a shorter period.

Rule 143 — Application for Licence

1. To get or renew a licence, submit a written application to the relevant authority.
2. Application forms by purpose:
   • Form VII: For transporting petroleum by road.
   • Form VIII: For fuelling aircraft, heavy machinery, etc.
   • Form IX: For importing and storing petroleum.
   • Form X: For decanting kerosene from vehicles.

Rule 144 — No-Objection Certificate (NOC)

1. If the Chief Controller or Controller is the licensing authority, you must first apply to the District Authority for a NOC, submitting two copies of the site plan. The District Authority must process the NOC within three months.
2. The NOC must include a copy of the site plan with the District Authority's official seal.
3. If the District Authority objects, the Chief Controller or Controller will not issue the licence without approval from the Central Government.

Rule 145 — Licence Details

1. Every licence comes with specific conditions. A copy of the plan(s) showing the layout of the licensed premises must be attached and signed by the licensing authority.
2. An identical copy of the approved plan must be kept on file at the licensing authority's office. (Exception: Form XVIII licences.)

Rule 146 — Approval Needed for Changes to Licensed Premises

1. No changes to licensed premises may be made without prior approval from the licensing authority.
2. Submit three copies of the detailed plan showing proposed changes, along with a fee of ₹400.
3. After approved changes are made, apply to amend the licence accordingly.

Rule 147 — Amending the Licence

1. The amendment fee is ₹500 plus any difference between the original and amended licence fees.
2. Submit the appropriate form (Form VII, VIII, IX, or X) with the original licence, approved plans, revised plans, amendment fee, and any required certificates.

Rule 148 — Renewal of Licence

1. Licences (except Form III or XVII) can be renewed for up to three years if the licensee has followed the rules.
2. Refunds for early surrender are available for unused portions, except for the year of surrender or any period during which petroleum was received or stored.
3. Renewal application must be submitted at least 30 days before expiry.
4. Late renewal (within 30 days after expiry): renewal fee is doubled.
5. No renewal is possible if the application is submitted more than 30 days after expiry.

Rule 149 — Refusal of No-Objection Certificate (NOC)

• If the district authority refuses to issue a NOC, they must give a written explanation, and the applicant must be given a chance to present their case before refusal.

Rule 150 — Cancellation of No-Objection Certificate (NOC)

1. A NOC can be cancelled if the district authority or state government determines the licensee no longer has the right to use the site for storing petroleum.
2. The licensee must be given a chance to explain before cancellation. Written reasons must be provided and a copy sent to the licensee and licensing authority immediately.

Rule 151 — Refusal of Licence

• If the licensing authority refuses to grant, amend, renew, or transfer a licence, they must provide written reasons for the refusal.

Rule 152 — Suspension and Cancellation of Licence

1. Reasons for Cancellation or Suspension:
   1. Licensee ceases to have the right to use the site.
   2. NOC is cancelled by the District Authority or State Government.
   3. Violation of the Petroleum Act, rules, or licence conditions.
2. The licensee must be given a chance to be heard before suspension or cancellation, except in cases of immediate public danger (where a temporary suspension may be imposed first) or Central Government orders in the public interest.
3. Any authority suspending or cancelling a licence must give written reasons.

Rule 153 — Procedure on Expiration, Suspension, or Cancellation of Licence

1. The licensee must notify the District Authority about the type and amount of petroleum in their possession and follow disposal directions.
2. A temporary licence can be granted for up to three months after expiry/suspension/cancellation, only for petroleum already in storage.
3. Temporary licence fee is proportionate to the time it is valid, compared to the full yearly fee.

Rule 154 — Appeals

1. Decisions may be appealed:
   • To the Central Government if the Chief Controller made the decision.
   • To the Chief Controller if a Controller made the decision.
   • To the official superior of the District Authority if the District Authority made the decision.
2. An appeal against NOC cancellation goes to the authority directly above the District Authority.
3. The appeal must be submitted in writing within 60 days of the order, with a copy of the order attached.

Rule 155 — Supply of Rules

• When a storage licence is granted, the licensee receives an extract of important rules free of charge, covering:
  • General conditions (Rules 3–12).
  • Safety, storage, and operational procedures (Rules 102–134).
  • Alterations, renewals, and appeals (Rules 146–159).

Rule 156 — Transfer of Licence for Storage

1. A licensee can apply to transfer their licence to another person before it expires.
2. Required documents:
   1. A letter from the current licensee stating the full name and address of the transferee.
   2. An application (Form IX) filled out and signed by the transferee.
   3. A fee of ₹500.
3. The transferee will have the same rights and responsibilities as the original licensee.

Rule 157 — Procedure on Death or Disability of Licensee

1. If the licensee dies, becomes insolvent, mentally incapable, or is otherwise disabled, the person continuing the business is not liable for penalties during the period they apply for a new licence.
2. A no-objection certificate (NOC) from the District Authority is required for the new licence application.
3. Fee for the new licence: ₹200 for the remaining period of the original licence.

Rule 158 — Loss of Licence

• If the original licence is lost or destroyed, the licensee may apply for a duplicate by submitting a copy of the original plans and paying a fee of ₹200.

Rule 159 — Production of Licence on Demand

1. A person holding a licence must produce the licence (or authenticated copy) when asked by an Inspector at the licensed premises.
2. Authenticated copies can be obtained from the issuing authority for a fee of ₹50 each.

Rule 160 — Procedure on Reports of Infringement

• If there is a report of an infringement of the Petroleum Act or these rules, the District Authority must inform the Chief Controller about the actions they have taken.

Rule 161 — Executive Control Over Authorities

• All authorities (other than the Central Government) acting under this chapter perform their duties under the control of the Central Government.
• This does not affect the Chief Controller's executive control over subordinate officers.