PESO License for Petroleum Storage is an important regulatory approval for industries, fuel stations, infrastructure projects, factories, warehouses and businesses that store petrol, diesel, kerosene, naphtha, aviation fuel, furnace oil or other petroleum products.

Petroleum products are highly flammable and may create serious fire, explosion, leakage and environmental risks when stored without proper safety controls. Therefore, petroleum storage facilities must be designed, constructed and operated according to the Petroleum Act, 1934, the Petroleum Rules, 2002 and subsequent amendments.

The Petroleum and Explosives Safety Organisation, commonly known as PESO, administers petroleum safety requirements through its head office, circle offices and sub-circle offices. Depending on the petroleum class, storage quantity, tank capacity and storage method, the approval may be issued by PESO or the concerned District Authority.

A PESO License Consultant helps businesses determine licence applicability, classify the petroleum product, select the correct licence form, prepare technical drawings, obtain prior approval, coordinate the District Authority NOC, arrange tank testing and submit the final licence application.

What is a PESO License for Petroleum Storage?

A PESO License for Petroleum Storage is an authorization permitting a business to store specified petroleum products at an approved location and within the permitted capacity.

The licence normally specifies:

• Name of the licence holder
• Address of the licensed premises
• Approved petroleum class
• Permitted storage quantity
• Number and capacity of tanks
• Type of storage installation
• Approved layout and specifications
• Conditions that must be followed
• Validity of the licence

The licence does not provide unrestricted permission to store any petroleum product. The facility must remain within the product class, storage capacity, tank arrangement and layout approved by the licensing authority.

Any major change in tank capacity, product class, licensed area, company ownership or storage arrangement may require prior approval or amendment of the existing licence.

What is PESO?

PESO stands for Petroleum and Explosives Safety Organisation. It functions under the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India.

PESO administers safety requirements relating to petroleum, explosives, compressed gases, gas cylinders and static and mobile pressure vessels. Under the Petroleum Rules, PESO handles approvals and licences relating to petroleum storage installations, retail outlets, non-bulk storage, petroleum tank vehicles and certain other regulated activities.

PESO was earlier commonly known as the Department of Explosives. Its primary focus is safety of life, property and the surrounding area where hazardous substances are stored, handled or transported.

Legal Framework for Petroleum Storage

Petroleum storage in India is primarily regulated under:

• Petroleum Act, 1934
• Petroleum Rules, 2002
• Petroleum Amendment Rules issued from time to time
• Petroleum Amendment Rules, 2024
• Conditions attached to the applicable licence form
• Approved technical and safety standards
• Directions and circulars issued by PESO
• Applicable Oil Industry Safety Directorate standards
• State and local fire, pollution and land-use requirements

The Petroleum Rules cover import, transport, storage, production, refining and blending of petroleum. Businesses should verify the latest amended provisions instead of relying only on the original 2002 text.

Classification of Petroleum Products

Petroleum products are classified according to their flash point. The flash point is the lowest temperature at which a petroleum product produces vapour capable of giving a momentary flash when ignited.

Petroleum Class A

Petroleum Class A includes petroleum having a flash point below 23°C.

Products commonly falling under this category may include petrol, motor spirit, naphtha, benzene and certain highly flammable solvents. The actual classification should be verified from the product specification, test report or safety data sheet.

Petroleum Class B

Petroleum Class B includes petroleum having a flash point of 23°C and above but below 65°C.

Depending on the grade and technical specification, products such as high-speed diesel, superior kerosene oil and aviation turbine fuel may fall under this category.

Petroleum Class C

Petroleum Class C includes petroleum having a flash point of 65°C and above but below 93°C.

Certain grades of furnace oil, light diesel oil and other comparatively higher flash-point petroleum products may fall within this class.

Products having a flash point of 93°C or above are generally outside the Class A, B and C classification under the Petroleum Act framework. Product classification should never be assumed only from the commercial product name because different grades may have different flash points.

Bulk and Non-Bulk Petroleum Storage

Correctly identifying whether storage is bulk or non-bulk is important when selecting the licence form.

Under the Petroleum Rules:

• A container or receptacle not exceeding 1,000 litres is generally treated as non-bulk storage.
• Petroleum stored in a tank exceeding 1,000 litres is treated as bulk storage.

A business storing petroleum in drums may therefore have a different licensing requirement from a business storing the same quantity in an underground or above-ground tank.

Who Needs a PESO License for Petroleum Storage?

PESO licensing may apply to businesses that store petroleum products for manufacturing, power generation, vehicle fuelling, construction, commercial distribution or industrial consumption.

Businesses commonly requiring applicability assessment include:

• Petrol pumps and retail fuel outlets
• Petroleum depots and terminals
• Manufacturing industries
• Chemical and pharmaceutical units
• Steel and metal processing plants
• Cement plants
• Mining and quarrying projects
• Construction and infrastructure companies
• Airports and aviation facilities
• Ports and logistics facilities
• Warehouses storing petroleum products
• Diesel generator fuel storage facilities
• Captive power plants
• Industrial boiler installations
• Transport and fleet operators
• Agricultural and heavy machinery operators
• Hotels, hospitals and commercial buildings with large diesel tanks
• Petroleum product importers and distributors

The requirement depends on the petroleum class, total quantity, tank size, method of storage and intended use.

Petroleum Storage Quantities Exempted from Licence

Certain limited quantities may be exempted from a petroleum storage licence, subject to the prescribed conditions.

Petroleum Class A

Petroleum Class A not intended for sale may be stored without a licence where the total quantity does not exceed 30 litres and the prescribed receptacle conditions are followed.

Storage above 30 litres generally requires further applicability assessment. Limited quantities above 30 litres and up to 300 litres may fall within the licensing jurisdiction of the District Authority.

Petroleum Class B

A licence may not be required for non-bulk storage of Petroleum Class B up to 2,500 litres, provided the applicable receptacle and storage conditions are satisfied.

Limited Class B storage above 2,500 litres and up to 25,000 litres may be licensed by the District Authority. Larger non-bulk quantities generally require PESO licensing.

Petroleum Class C

Petroleum Class C storage up to 45,000 litres may be exempted from a storage licence. However, storage exceeding 5,000 litres may require a prior report or one-time approval under Rule 140 of the Petroleum Rules.

Businesses should not interpret a licence exemption as an exemption from safety requirements. Even exempted petroleum quantities should be stored in safe, approved and properly segregated containers or tanks.

Types of Petroleum Storage Licences

The correct licence form depends on the nature of the petroleum activity.

Form XIV Licence

Form XIV applies to storing petroleum in tanks connected with a pump outfit for fuelling motor vehicles.

It is commonly associated with:

• Petrol pumps
• Diesel retail outlets
• Captive vehicle fuelling stations
• Approved motor vehicle fuel dispensing facilities

Form XV Licence

Form XV applies to the import and storage of petroleum in an installation.

It is commonly relevant for:

• Industrial petroleum storage tanks
• Petroleum depots
• Bulk diesel storage installations
• Manufacturing units with bulk fuel tanks
• Tank farms
• Captive fuel storage installations
• Petroleum import and storage facilities

For private installations, the relevant PESO circle office generally handles the licence. Certain PSU oil marketing company installations may be handled at the PESO head office level.

Form XVI Licence

Form XVI applies to petroleum stored otherwise than in bulk beyond the prescribed quantities.

It may cover:

• Petroleum Class A exceeding 300 litres
• Petroleum Class B exceeding 25,000 litres
• Petroleum Class C exceeding 45,000 litres
• Combined storage of more than one petroleum class
• Storage sheds containing drums, barrels or approved containers

Forms XII and XIII

Limited petroleum storage licences may be issued by the District Authority:

• Form XII for Petroleum Class A within the permitted limited quantity
• Form XIII for Petroleum Class B within the permitted limited quantity

Selecting the wrong form is one of the most common causes of delay in petroleum licensing.

Role of a PESO License Consultant

A PESO License Consultant assists businesses from initial applicability assessment to final licence issuance.

Consulting support may include:

• Petroleum product classification
• Flash-point and safety data review
• Storage quantity assessment
• Bulk or non-bulk classification
• Identification of correct licence form
• Site feasibility assessment
• Land document review
• Preparation of technical drawings
• Prior approval application
• Rule 144 NOC assistance
• Coordination with the District Authority
• Tank test certificate coordination
• Safety certificate coordination
• PESO portal application filing
• Government fee payment assistance
• Query and clarification response
• Inspection readiness support
• Licence amendment and renewal
• Licence transfer or surrender support

Professional assistance is particularly useful where multiple petroleum classes, underground tanks, above-ground tanks, dispensing systems or industrial facilities are involved.

Documents Required for PESO Petroleum Storage Licence

The document checklist depends on whether the application is for prior approval, licence grant, renewal, amendment or transfer.

Common documents may include:

• Application in Form IX
• Covering letter
• PAN of the applicant entity
• GST Registration Certificate
• Company Incorporation Certificate
• Partnership deed or LLP documents
• Authorized signatory documents
• Board resolution or authorization letter
• Land ownership documents
• Registered lease deed, where applicable
• Undertaking confirming legal physical possession of land
• Site address proof
• Product safety data sheet
• Petroleum product flash-point details
• Proposed tank capacity details
• Technical specification of tanks
• Scaled site and layout drawings
• Elevation and sectional drawings
• Rule 144 NOC from the District Authority
• Tank test certificate under Rule 126
• Safety certificate under Rule 130
• Existing licence and approved drawings for amendment or renewal
• Applicable government fee payment proof

The licensing authority may request additional documents where required to verify compliance with the Rules and licence conditions.

Requirements for the PESO Layout Drawing

The technical drawing is one of the most important documents in the PESO application.

The drawing should generally be prepared to scale and clearly show:

• Complete boundary of the licensed premises
• Dimensions of the proposed licensed area
• Approach road and entry-exit gates
• Nearby buildings and protected works
• Protected works within 100 metres
• Public roads and railway lines
• Overhead electrical lines
• Tank locations
• Tank identification numbers
• Tank capacity
• Construction material of tanks
• Underground or above-ground tank arrangement
• Fill points
• Discharge points
• Vent pipes
• Dip pipes
• Product pipelines
• Valves and pumps
• Petroleum unloading area
• Storage and filling sheds
• Dyke or containment arrangement
• Firefighting equipment
• Electrical installations
• Office and utility buildings
• Required safety distances

The storage tanks and related equipment must be installed according to the approved drawing. A material deviation may require revised prior approval and amendment of the licence.

PESO License Application Process

Step 1: Applicability Assessment

The first step is determining whether the proposed storage requires a PESO licence, District Authority licence or only a prior report.

The assessment considers:

• Name of petroleum product
• Flash point
• Petroleum class
• Total storage quantity
• Individual tank capacity
• Bulk or non-bulk storage
• Sale or captive consumption
• Industrial or retail use
• Number of storage tanks
• Storage in drums, containers or tanks

Step 2: Selection of Licence Form

The appropriate licence form is selected based on the proposed activity.

For example:

• Form XIV for vehicle fuel dispensing
• Form XV for a petroleum installation
• Form XVI for prescribed non-bulk storage
• Form XII or XIII for certain limited quantities

Step 3: Land and Site Assessment

The applicant should establish legal physical possession of the proposed site.

The site is reviewed for:

• Industrial or commercial land use
• Plot dimensions
• Approach road
• Distance from nearby buildings
• Electrical lines
• Public roads
• Residential areas
• Fire tender accessibility
• Space for tank installation
• Space for unloading and emergency movement

A licence may be difficult to obtain where the plot cannot accommodate the required safety distances.

Step 4: Preparation of Technical Drawing

A competent technical professional prepares the proposed site layout and storage arrangement.

The drawing should accurately represent the land dimensions, tanks, pipelines, unloading arrangements, firefighting facilities and surrounding protected works.

Step 5: Application for Prior Approval

The prior approval application is submitted with:

• Form IX
• Covering letter
• Land documents
• Legal possession undertaking
• Technical drawing
• Product and capacity details
• Applicable fee

PESO reviews the proposal to determine whether petroleum may be stored safely at the site.

Step 6: District Authority NOC

A No Objection Certificate is generally required under Rule 144 for the grant of specified petroleum storage licences.

Depending on the jurisdiction, the District Authority may seek reports from:

• Police department
• Fire department
• Revenue department
• Local authority
• Land-use department
• Pollution Control Board
• Other concerned agencies

The exact procedure may vary from one district or state to another.

Step 7: Installation of Tanks and Safety Systems

After obtaining the required approval, the applicant may proceed with installation according to the approved drawing.

The applicant should ensure that:

• Tank capacity matches the approval
• Tank location is unchanged
• Pipelines and vents follow the approved arrangement
• Required separation distances are maintained
• Firefighting equipment is installed
• Electrical equipment is suitable for the hazardous area
• Earthing and bonding are provided
• Spill containment is available
• Safe unloading arrangements are established

Step 8: Tank Testing

Petroleum storage tanks must be tested as applicable and supported by the prescribed certificate issued by a recognized competent person.

The testing process may include:

• Visual examination
• Dimensional verification
• Hydrostatic or pressure testing
• Leak testing
• Verification of fittings
• Verification of tank identification and capacity

The tank test certificate is generally required for the final licence application.

Step 9: Safety Certificate

A safety certificate under Rule 130 may be required from a recognized competent person.

The certificate confirms that the installation has been constructed according to the approved plan and complies with applicable safety provisions.

Step 10: Application for Licence Grant

The final licence application generally includes:

• Application form
• Approved drawing
• Rule 144 NOC
• Tank test certificate
• Safety certificate
• Land documents
• Licence fee
• Supporting declarations
• Other documents requested by PESO

Step 11: Inspection and Query Response

PESO may inspect the facility or seek clarifications regarding:

• Actual tank capacity
• Tank location
• Safety distances
• Fire protection
• Electrical safety
• Unloading arrangement
• Land possession
• Difference between the approved drawing and constructed facility

Any discrepancy should be corrected promptly.

Step 12: Licence Issuance

After satisfactory verification, the licence is issued in the applicable form.

The business should display or maintain the licence at the premises and operate only within the approved quantity, product class and layout.

Safety Requirements for Petroleum Storage

A petroleum licence is based on both documentation and physical safety arrangements.

Important safety measures may include:

• Adequate separation from protected works
• Approved storage tanks and fittings
• Safe venting arrangement
• Earthing and electrical bonding
• Lightning protection, where applicable
• Flameproof electrical equipment in hazardous areas
• Emergency isolation system
• Fire extinguishers and firefighting equipment
• Dyke or secondary containment
• Spill control arrangements
• Safe tanker unloading area
• Clear access for emergency vehicles
• Display of warning boards
• Prohibition of smoking and ignition sources
• Trained operating personnel
• Periodic inspection of tanks and pipelines
• Emergency response procedures
• Clean and vegetation-free licensed premises

PESO safety instructions also require petroleum premises to remain free from rubbish and ignition sources and require storage tanks to be protected against corrosion through approved protective measures.

Rule 144 NOC for Petroleum Storage

The Rule 144 NOC is an important part of the licensing process for many petroleum storage facilities.

The NOC confirms that the District Authority has no objection to the proposed petroleum storage at the specified location.

The District Authority may examine:

• Legality of land possession
• Suitability of the location
• Impact on surrounding buildings
• Public safety
• Fire access
• Police concerns
• Local land-use restrictions
• Nearby population and development
• Approach road and traffic movement

A Rule 144 NOC should not be confused with a Fire NOC, Pollution Control Board consent or municipal approval. These are separate approvals, although local authorities may consider them during the NOC process.

PESO Licence Amendment

A licence amendment may be required when the business proposes any significant change.

Common amendment situations include:

• Increase in storage capacity
• Addition of a new tank
• Removal or replacement of a tank
• Change in petroleum class
• Change in licensed product
• Change in premises dimensions
• Change in fill or discharge point
• Change in tank location
• Addition of a pump or dispensing unit
• Change in company name
• Change in constitution of the business
• Modification of the approved layout

Physical modifications should not be completed first and regularized later. Prior approval should be obtained where required before altering the installation.

PESO Licence Renewal

Petroleum licences must remain valid throughout storage and operation.

Renewal support may include:

• Review of licence validity
• Verification of existing approved drawings
• Confirmation that no unauthorized changes were made
• Preparation of renewal application
• Payment of renewal fee
• Submission of declarations
• Response to PESO queries
• Updating contact and authorized person details

Businesses should begin the renewal process before expiry. Operating with an expired licence may interrupt fuel supplies, insurance compliance, audits and industrial operations.

Transfer and Surrender of Licence

A licence transfer may be required when:

• The business is sold
• The licensed premises change ownership
• The operating company changes
• A merger or restructuring takes place
• The licence is to be transferred to another legal entity

A licence may also be surrendered when petroleum storage is permanently discontinued.

Before surrender, the tanks, pipelines and containers may need to be emptied, cleaned and certified gas-free. The original licence and approved drawings may also need to be submitted to the licensing authority.

Cost of PESO License for Petroleum Storage

There is no single fixed cost applicable to every petroleum storage licence.

The total cost depends on:

• Licence form
• Petroleum class
• Storage capacity
• Number of tanks
• Licence duration
• New licence or amendment
• Drawing preparation
• Land document status
• District Authority NOC
• Tank fabrication and testing
• Competent person certification
• Firefighting requirements
• Professional consultancy charges
• Additional technical modifications

Government fees should be calculated according to the applicable Rules and the current PESO fee system. Businesses should avoid relying on a generic quotation before the product class, tank capacity and licence form have been confirmed.

Timeline for PESO Petroleum Storage Licence

The official processing time depends on the completeness of the application, site suitability, District Authority NOC, construction progress and query response.

A practical project schedule may include:

• Applicability assessment: 1 to 3 working days
• Document and drawing preparation: 5 to 15 working days
• Prior approval processing: depends on scrutiny and queries
• District Authority NOC: depends on local authority procedure
• Tank installation and construction: depends on the project
• Testing and safety certification: 3 to 10 working days after readiness
• Final licence processing: depends on inspection and document verification

For planning purposes, the documentation and approval cycle may take approximately 6 to 16 weeks in straightforward cases, excluding civil construction and equipment installation. Complex sites, land disputes, drawing revisions or delayed departmental reports may extend the timeline.

This is a practical estimate and not a guaranteed statutory approval period.

Common Mistakes During PESO Licensing

Many petroleum licence applications are delayed because the site is developed before the compliance requirements are assessed.

Common mistakes include:

• Selecting the wrong licence form
• Incorrect petroleum classification
• Not verifying the flash point
• Treating bulk storage as non-bulk storage
• Installing tanks before prior approval
• Insufficient safety distance
• Mismatch in plot dimensions
• Incomplete land documents
• Unregistered or unclear lease documents
• Incorrect tank capacity
• Difference between drawing and installation
• Missing protected works in the layout
• Incorrect vent or fill-point location
• Missing Rule 144 NOC
• Missing tank test certificate
• Missing safety certificate
• Using unsuitable electrical equipment
• Increasing capacity without amendment
• Applying for renewal after licence expiry
• Storing an unapproved petroleum product

Early technical assessment can prevent expensive changes after tanks and pipelines have already been installed.

Related Approvals for Petroleum Storage Facilities

Obtaining a PESO licence may not complete every regulatory requirement of the project.

Depending on the facility, additional approvals may include:

• Consent to Establish from the Pollution Control Board
• Consent to Operate
• Fire NOC
• Factory Licence
• Building plan approval
• Industrial land-use approval
• Trade licence
• Electrical inspector approval
• Environmental Clearance, where applicable
• Hazardous Waste Authorization
• Groundwater permission
• Boiler approval
• Legal Metrology approval for dispensing equipment
• Petroleum dealership or oil company authorization
• Local municipal approval
• Emergency response and disaster management plan

These approvals should be mapped during the project planning stage rather than after commissioning.

Benefits of Obtaining a PESO License

A valid petroleum storage licence helps businesses:

• Store petroleum legally
• Reduce fire and explosion risk
• Establish an approved storage system
• Receive fuel supplies without compliance disruption
• Improve worker and public safety
• Support factory and fire inspections
• Meet insurance requirements
• Maintain customer and investor confidence
• Avoid unauthorized storage penalties
• Support long-term industrial operations
• Expand storage capacity through an approved process
• Demonstrate regulatory compliance during audits

For industrial facilities, petroleum storage planning should begin before finalizing the tank location and civil layout.

Why Work with a PESO License Consultant?

PESO licensing involves more than filling an online form. The approval is closely connected with the site layout, petroleum classification, tank design, safety distance, District Authority NOC and physical construction.

An experienced consultant can assist with:

• Initial applicability assessment
• Selection of licence form
• Review of flash-point documents
• Site feasibility evaluation
• Preparation of technical drawings
• Prior approval filing
• Rule 144 NOC assistance
• Tank testing coordination
• Safety certificate coordination
• Final licence application
• Query response
• Inspection preparation
• Licence renewal and amendment
• Related environmental approvals
• Ongoing petroleum compliance advisory

Professional guidance can help identify design problems before capital is invested in tanks, pipelines, civil work and firefighting infrastructure.

Learn More About PESO License for Petroleum Storage

If your business is planning to install diesel tanks, petroleum storage tanks, a captive fuelling station, a petrol pump or an industrial fuel storage installation, the licence requirement should be evaluated before beginning construction.

Read the complete guide here:

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