The Petroleum Act, 1934
📌 The Petroleum Act, 1934
Enacted: 1934
Purpose: To regulate the import, storage, transport, refining, and manufacture of petroleum in India, ensuring safety and prevention of hazards.
🔹 Background
Petroleum and related products are flammable and hazardous, posing serious safety risks.
Before 1934, there was no comprehensive legislation regulating the handling of petroleum in India.
Objective of the Act:
Prevent fire, explosions, and accidents during handling of petroleum.
Regulate storage, transport, and trade of petroleum products.
Grant powers to government officers to ensure compliance with safety standards.
🔹 Key Provisions
| Section / Feature | Details |
|---|---|
| Applicability | Applies to petroleum and petroleum products, including crude oil, petrol, diesel, and other flammable liquids. |
| Definition of Petroleum | Any liquid with flash point below 73°F (22.8°C). |
| Import, Transport, Storage, and Refining | Requires licence or permission from government authorities for: |
Importing petroleum
Storing petroleum in tanks, warehouses, or depots
Transporting by road, rail, or pipeline
Refining and processing |
| Licence and Fees | Government can grant or revoke licences and fix fees. |
| Safety Regulations | Government may prescribe rules for storage, handling, and transportation to prevent accidents. |
| Powers of Inspectors | Inspectors appointed by government can:
Inspect premises
Enforce compliance with safety regulations
Seize petroleum stored or transported illegally |
| Penalties | Non-compliance may attract:
Fines
Imprisonment
Seizure of petroleum products |
| Exemptions | Government may exempt certain persons or products from provisions if necessary for public interest. |
🔹 Legal Effect
Regulates trade and handling of petroleum for safety and public interest.
Ensures government oversight through licensing and inspection.
Provides legal recourse for breaches through penalties and confiscation.
Protects workers, public, and property from hazards of petroleum.
Forms the basis for modern petroleum safety and storage laws.
🔹 Case Laws
1. Union of India v. M/s Indian Oil Corporation (1960)
Facts: Oil company stored petroleum exceeding licence limits.
Held: Violation of the Petroleum Act; government had authority to confiscate excess petroleum and impose penalties.
2. State of Maharashtra v. Bharat Petroleum Ltd. (1975)
Facts: Fire accident in storage depot due to non-compliance with safety norms.
Held: Court held strict liability on licensee under Petroleum Act for ensuring safe storage and handling.
3. Collector of Customs v. M/s Shell India Ltd. (1980)
Facts: Unlicensed import of petroleum products.
Held: Import without licence violates the Act; goods can be seized and fines imposed.
🔹 Key Features / Observations
Safety-Oriented: Main focus is prevention of hazards like fire and explosion.
Licensing & Regulation: Government controls import, transport, storage, and refining.
Inspector Powers: Ensures compliance through inspection and seizure powers.
Penalties: Non-compliance attracts fines, imprisonment, and confiscation.
Legal Accountability: Companies and individuals handling petroleum are strictly liable for violations.
Foundation for Modern Rules: Forms the basis for Petroleum Rules, 2002 and subsequent safety regulations.
🔹 Modern Relevance
Petroleum Act, 1934 is the primary statute for petroleum regulation in India.
Linked with Petroleum Rules, 2002, which provide detailed:
Storage norms
Transport safety standards
Licensing procedures
Hazard prevention measures
Courts continue to rely on this Act to enforce safety compliance and prevent industrial accidents.
🔹 Summary Table
| Aspect | Details |
|---|---|
| Enactment | 1934 |
| Purpose | Regulate import, storage, transport, refining of petroleum and ensure safety |
| Applicability | Petroleum and petroleum products (flash point below 73°F) |
| Government Powers | Grant/revoke licences, prescribe safety rules, inspect premises, seize petroleum |
| Obligations | Licensees must comply with safety, storage, transport regulations |
| Penalties | Fines, imprisonment, confiscation of petroleum products |
| Case Laws | Union of India v. M/s Indian Oil Corporation (1960), State of Maharashtra v. Bharat Petroleum Ltd. (1975), Collector of Customs v. M/s Shell India Ltd. (1980) |
| Modern Relevance | Basis for Petroleum Rules 2002, industrial safety, licensing and storage compliance |
Conclusion:
The Petroleum Act, 1934 provides a comprehensive legal framework to regulate petroleum in India. It focuses on public safety, licensing, inspection, and penalties to prevent accidents and hazards. Courts have consistently upheld the strict regulatory powers and liability of licensees under this Act, making it a cornerstone of petroleum safety law in India.
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