IndiaPosted at: Oct 20 2026 12:02PM


PNGRB introduces penalties of up to Rs 1 crore for regulatory violations

New Delhi, Oct 20 (UNI) The Petroleum and Natural Gas Regulatory Board (PNGRB) has tightened compliance requirements for oil and gas operators, introducing civil penalties of up to Rs 1 crore for each regulatory violation and an additional Rs 10 lakh for every day a default continues.
The regulator has also introduced a revised annual fee structure for refineries, LNG terminals, LPG bottling plants and gas processing units, along with new charges for reducing performance bank guarantees, seeking repeated extensions of pipeline project deadlines and obtaining dedicated pipeline connectivity.
The Petroleum and Natural Gas Regulatory Board (Levy of Fee and Other Charges) Amendment Regulations, 2026, came into force on October 19 following their publication in the Official Gazette.
Under the amended rules, the regulator can impose a civil penalty of up to Rs 1 crore for each contravention, along with an additional Rs 10 lakh for every day the violation continues. Serious or persistent defaults may also lead to suspension or termination of operations under applicable legal provisions.
The penalties will not be imposed automatically. The regulator must issue a notice and give the entity concerned an opportunity to present its case before passing an order.
Payment of a penalty will not absolve an operator of its obligation to clear outstanding regulatory fees or surcharges, the notification states.
Under the revised annual fee structure, LNG terminals and refineries will be charged Rs 5 lakh per installation, while gas processing units will pay Rs 3 lakh. LPG bottling plants and petroleum, oil and lubricants (POL) installations will attract an annual fee of Rs 2 lakh each.
Pipeline operators will face annual charges linked to pipeline length and revenue.
For pipelines longer than 50 km, the annual fee after commencement of operations will be Rs 5 lakh or 0.02 per cent of revenue earned in the previous financial year, excluding taxes, whichever is higher. For pipelines up to 50 km long, the fee will be Rs 1 lakh or 0.02 per cent of revenue, whichever is higher.
Before operations begin, the charges will be Rs 5 lakh for pipelines exceeding 50 km and Rs 1 lakh for shorter pipelines.
The amendments also introduce non-refundable processing fees for applications seeking a reduction in performance bank guarantees (PBGs). Applications involving guarantees of up to Rs 10 crore will attract a fee of Rs 1 lakh, while those exceeding Rs 10 crore but not Rs 100 crore will cost Rs 5 lakh. Guarantees above Rs 100 crore will attract a fee of Rs 10 lakh.
The fee will not be refunded even if the regulator rejects an application after verification.
Pipeline developers seeking extensions to project completion deadlines will have to pay Rs 5 lakh for each application beginning with the fourth extension request. The provision covers natural gas and petroleum product pipelines.
The amended regulations also prescribe a processing fee of Rs 5 lakh for applications seeking dedicated pipeline connectivity and Rs 1 lakh for specified compressed biogas (CBG) connectivity requests involving nearby natural gas pipelines or decompression units.
In another change, the regulator has replaced references to the 2011 Census with the “Latest Census of India” in provisions governing the calculation of certain regulatory charges.
The notification clarifies that entities covered by existing pipeline and city gas distribution authorisation regulations will continue to be governed by the default procedures specified under those rules. Other cases of non-compliance will be dealt with under the newly introduced enforcement mechanism.
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