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- Compliance Guide
Petroleum Act Penalties in Pakistan: Fines for Storing Without a Licence
In August 2025 Parliament rewrote the penalty section of the Petroleum Act 1934. Fines that were once Rs 500 now start at Rs 1 million, and unlicensed sites can be sealed and their tanks confiscated. This guide explains each new Petroleum Act penalty, who enforces it and how to keep your DPL licence safe.
Quick Answer
The Petroleum (Amendment) Act 2025 at a Glance
The Petroleum (Amendment) Act, 2025 (Act No. XXVI of 2025) received the President’s assent on 29 August 2025, was published in the Gazette of Pakistan on 2 September 2025 and came into force at once. It amends sections 2, 4, 23, 24, 25, 26 and 27 of the Petroleum Act 1934. The main penalties are:
| Situation | Penalty under the 2025 law | Section |
|---|---|---|
| Illegally importing, transporting, storing, selling, producing, refining or blending petroleum | Fine of Rs 1 million | 23(3)(a) |
| Repeating the same offence | Fine of Rs 5 million | 23(3)(b) |
| Facility storing and selling petroleum to the public without a prior licence | Sealing, confiscation of machinery, tanks and stock, and a fine of Rs 10 million on the owner | 23(3A) |
| Form K licence expired or cancelled and not renewed within 6 months | Closure, confiscation and a fine of Rs 1 million | 23(3B) |
| Licensed site found storing or selling smuggled petroleum | Closure, confiscation, a fine of Rs 100 million and cancellation of the licence | 23(3C) |
| Vehicle carrying smuggled petroleum | Vehicle and the petroleum in it confiscated | 23(3D) |
Source: Gazette of Pakistan, Extraordinary, Part I, 2 September 2025.
Then and Now
Old Fines vs New Fines Under the Petroleum Act
The original 1934 Act punished most offences with a fine of up to Rs 500, or up to Rs 2,000 for a repeat offence. A Magistrate could order the petroleum and its containers to be confiscated. These amounts had lost all meaning, so for many illegal depots and roadside fuel sellers the fine was cheaper than a licence. The 2025 amendment changes who acts, how fast and for how much:
| Point | Original 1934 Act | After the 2025 amendment |
|---|---|---|
| Fine for illegal storage or sale | Up to Rs 500 (repeat up to Rs 2,000) | Rs 1 million (repeat Rs 5 million) |
| Who orders confiscation | The convicting Magistrate | The Deputy Commissioner or an officer he authorises, not below Assistant Commissioner |
| Review of a confiscation order | High Court, in appeal or revision | Court of Sessions, appeal within 30 days |
| Court that tries offences | Magistrate of the first class | Court of Sessions |
| Officers’ powers on a raid | Enter, search and seize | Enter, search, seal and seize |
| Confiscated goods | No special procedure | Handed to Customs under the Customs Act 1969 |
The amendment also adds a new rule-making power, section 4(kk), for real-time digital tracking of petroleum stock and dispensing at petrol stations, storage points and on the road. The rules for that system are still to come, but licensed sites should expect stock records to be checked electronically.
Petrol Pumps
The 6-Month Grace Period for Expired Form K Licences
Section 23(3B) gives a petrol pump whose Form K storage licence has expired or been cancelled a grace period of six months from the date of expiry or cancellation to get it renewed or restored. After that the pump can be closed, its machinery, tanks and stock confiscated, and the owner fined Rs 1 million.
The same section puts a duty on the licensing office too:
- NEPSA (the Department of Explosives) must renew the licence within one month of receiving the application, the required documents and the fee.
- If the officer does not renew in that time, he must record the reasons for the delay in writing.
- An appeal against a refusal, or a failure to renew, lies with the Secretary, Petroleum Division, within 30 days of the officer’s decision.
Important: the grace period is written for Form K licences only. The Act does not give the same window to Form L or Form M holders, so treat the expiry date on those licences as the real deadline. Our DPL renewal service files renewals before they lapse.
Enforcement
Who Can Seal Your Site and What Happens Next
- Inspection. Officers authorised under the Act, usually NEPSA inspectors working with the district administration, visit the site and check the licence, the approved plan and the stock.
- Sealing and seizure. Under the amended section 26, officers can now seal the premises as well as seize the petroleum.
- Confiscation order. The Deputy Commissioner, or an officer he authorises not below the rank of Assistant Commissioner, can order confiscation of machinery, equipment, storage tanks, containers and stock.
- Handover to Customs. Confiscated goods go to Customs officers, and the Customs Act 1969 applies to their detention, seizure and adjudication.
- Appeal. A person affected by a confiscation order can appeal to the Court of Sessions within 30 days of being told of the order.
- Trial. Offences under the Act are now tried by the Court of Sessions.
Accidents carry their own duty: under section 27, after a fire or explosion that causes death or serious injury, the person in charge must inform the nearest Magistrate or police station at once.
Stay Compliant
How to Avoid Petroleum Act Penalties
- Licence first, stock later. Do not store or sell any petroleum product until the licence is in your hands. If you are already operating, start the process now: see how to get a DPL licence in Pakistan.
- Store only what the licence allows. Every product and its maximum quantity are written on the licence. Check the class of each product with our petroleum Class A, B and C guide.
- Renew early. File the renewal well before the expiry date, with the challan and documents complete, so the one-month renewal rule works in your favour.
- Keep papers at the site. The licence, the approved plan and the safety data sheets should be ready for any inspector.
- Buy only from licensed suppliers and keep every invoice. A licensed site caught with smuggled petroleum faces a Rs 100 million fine and loses its licence.
- Build to the approved plan. Any change to tanks, godowns or distances needs NEPSA approval first. See the DPL licence requirements.
This guide summarises the Gazette text for general information. It is not legal advice; if a case has already been registered against you, speak to a lawyer as well.
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Common Questions
Petroleum Act Penalties: FAQs
Quick answers to what clients ask us about the 2025 penalties.
What is the fine for storing petroleum without a licence in Pakistan?
Under section 23(3)(a) of the Petroleum Act, as amended in 2025, illegal storage of petroleum carries a fine of Rs 1 million, and Rs 5 million for a repeat offence. If the site sells petroleum to the public without a licence, it can also be sealed, its stock and tanks confiscated, and the owner fined Rs 10 million.
When did the Petroleum (Amendment) Act 2025 come into force?
It came into force at once. The President gave assent on 29 August 2025 and it was published in the Gazette of Pakistan on 2 September 2025.
Is there a grace period if my licence has expired?
Only for Form K petrol pump licences: the owner has six months from expiry or cancellation to renew or restore the licence. The Act gives no such grace period for Form L or Form M licences.
How long does NEPSA have to renew a licence?
One month from receiving a complete application, the required documents and the fee. If the officer does not renew in that time, he must record the reasons in writing, and you can appeal to the Secretary, Petroleum Division within 30 days.
Who can confiscate petroleum and storage tanks?
The Deputy Commissioner, or an officer he authorises who is not below the rank of Assistant Commissioner. The confiscated goods are then handed to Customs under the Customs Act 1969.
Do these penalties apply to chemical godowns as well as petrol pumps?
Yes. The penalties apply to any petroleum, which since the 2023 amendment means products with a flash point below 93°C. Many solvents and thinners stored in drums fall in that range and need a Form M licence.
Is Your Site Fully Licensed?
Send us your licence number or site details. We will check the licence status, the products and quantities on it and the renewal date, and fix any gap before an inspection does.