corporate law
A recent consultation led by Union Minister of Commerce and Industry, Shri Piyush Goyal, aimed to find a balance between compliance in the Petroleum and Explosives Industry and public safety. Key announcements from the consultation included significant reductions in licensing fees: an 80% decrease for Women Entrepreneurs and a 50% reduction for Micro, Small, and Medium Enterprises (MSMEs), as facilitated by the Petroleum and Explosives Safety Organisation (PESO).
Minister Goyal urged PESO to partner with the Central Pollution Control Board (CPCB) and the Ministry of Petroleum and Natural Gas (MoPNG) to develop safety guidelines that would permit petrol pumps to operate within residential areas, particularly those located 30-50 meters from living spaces. Additional directives included enhancing licensing processes, incorporating Third-Party Inspection Agencies (TPIAs), and improving online approval systems.
This consultation involved over 150 stakeholders and underscored industry recommendations aimed at refining regulatory frameworks and boosting operational efficiencies, with a specific focus on advancing digitalization and transparency within PESO's functions.
Licensing Fee Reductions:
Development of Safety Guidelines:
PESO to collaborate with CPCB and MoPNG on templates for petrol pumps situated near residential areas.
Implementation of QR Codes:
QR codes will enhance traceability and safety in LPG and industrial gas supply.
Extended License Validity:
Proposal for a ten-year validity period for explosives manufacturing and transport licenses.
Role of Third-Party Inspection Agencies (TPIAs):
Expanding TPIAs' involvement across various regulatory processes.
Online Permission Modules:
Creation of online systems for processes currently requiring offline methods.
Recruitment Acceleration:
Expedite hiring within PESO to enhance operational efficiency.
Additionally, the licensing process for petrol pumps, governed by Form XIV of the Petroleum Rules 2002, and for CNG dispensing facilities, as per Form G of the Gas Cylinders Rules, will undergo streamlining. The proposed amendments aim to reduce compliance burdens and lighten the workload for PESO personnel.
The Minister emphasized that PESO officers must strictly follow application clearance timelines and adopt global best practices in regulation. FAQs will be issued to clarify various approvals and licenses. Moreover, Municipal NOCs will be facilitated through the Licensing System for District Authority (LSDA) online system.
In response to industry feedback, the establishment of committees led by MoPNG and industry associations was suggested to propose best practices and regulatory changes. This ensures stakeholders' feedback is integral to creating a more effective operational framework. A task force comprising industry representatives, PESO officers, DPIIT personnel, CPCB officials, MoPNG, and Oil companies will collaboratively advance these reforms.
The consultation served as a platform for stakeholders from various sectors to discuss essential regulatory advancements. Notable associations, including the Federation of Agrivalue Chain Manufacturers and Exporters (FAME), Explosives Manufacturers Welfare Association (EMWA), Indian Ammonium Nitrate Manufacturers Association (IANMA), and the All India Industrial Gas Manufacturers Association (AIIGMA), highlighted significant areas for improving operational efficiencies and simplifying regulations.
As a subordinate office under the DPIIT, PESO is crucial in managing regulatory frameworks established under the Explosives Act, 1884, and the Petroleum Act, 1934. Recent reforms include a paperless licensing system, strict adherence to approval timelines, and the incorporation of TPIAs—all aimed at simplifying compliance and enhancing safety standards.
This stakeholder consultation marks a pivotal advancement toward fostering a supportive regulatory environment in the petroleum and explosives sectors. The DPIIT remains dedicated to minimizing compliance burdens, promoting business facilitation, and upholding industry standards across the nation. Continuous engagement with stakeholders and the integration of their feedback will be essential for streamlining PESO's regulatory processes as the Ministry progresses toward a risk-based regulatory approach and digital transformation.