PESO Compliance for Diesel Storage and DG Sets on Indian Construction Sites
By Riley Quinn on June 3, 2026
Every Indian construction site that stores diesel for vehicles, equipment, or diesel generator (DG) sets sits inside the regulatory scope of the Petroleum and Explosives Safety Organisation — PESO, under the Department for Promotion of Industry and Internal Trade. Under the Petroleum Rules 2002, a site must hold a valid PESO licence the moment its diesel storage crosses defined thresholds, its tank location crosses minimum safety distances, or its DG-set fuel arrangement crosses prescribed quantity limits. Get this wrong and the consequences are not paper fines — they are licence revocation, a District Collector stop-work order, and personal liability on the project manager under Section 23 of the Petroleum Act 1934. This is your complete reference on PESO compliance for diesel storage and DG sets on Indian construction sites — covering when a licence is required, the 3-class petroleum framework, the 5-stage licensing journey, the safety distance matrix, and the documentation PESO inspectors and District Collector teams expect to see. Sign up free to maintain a PESO-aligned digital compliance trail on HVI.
REF · COMPLIANCE PRIMER · 2026 · IN-CONSTRUCTION
PESO Compliance for Diesel Storage & DG Sets on Indian Construction Sites
Petroleum & Explosives Safety Organisation · Department for Promotion of Industry & Internal Trade · Petroleum Rules 2002
Governing LawPetroleum Act 1934 · Rules 2002
RegulatorPESO, HQ Nagpur · 5 Regional
Applies ToHSD · Petrol · Kerosene · FO
Primary FormForm XIV (own use) · XV (sale)
SAMPLE · NOT VALID
GOVERNMENT OF INDIA · PESO
PETROLEUM STORAGE LICENCE
Form XIV · Petroleum Rules 2002
Licence No.P/HQ/MH/15/3247(PXXX)
ClassB (HSD)
Tank Capacity20,000 Litres
Validity3 Years (Renewable)
PremisesEPC Construction Site · As per approved drawing
Subject to compliance with Petroleum Rules 2002, approved layout drawing, safety distances per Schedule, flameproof electricals, daily stock register maintenance, and inspection by Chief Controller of Explosives.
↑ This is what your premises must produce on demand to any PESO inspector or District Collector officer
When Do You Need a PESO Licence?
Three variables decide whether your construction site needs a PESO licence — petroleum class, total premises quantity, and whether the diesel is used or dispensed. Follow the decision cascade below to find your exact status. Book a demo to see PESO-aligned site audits run on HVI.
Q1
What is the diesel used for?Determines licence form before quantity matters
CONTINUE
Own consumption Equipment · DG sets · Internal refuelling
→ Go to Q2
STOP — LICENCE NEEDED
Sale or dispensing Even to subcontractors or hired vehicles
Form XV mandatory · regardless of quantity
Q2
What is your total premises diesel quantity?Aggregate of all tanks + DG day tanks — NOT individual tank size
EXEMPT
≤ 5,000 L Single small DG day tank only
Intimation to District Authority · No licence
LICENCE REQUIRED
5,001 L – 45,000 L Most construction sites land here
Form XIV · Standard 5-stage process
LICENCE + MSIHC
> 45,000 L Major depot / large EPC camps
Form XIV + MSIHC Rules 1989 schedule
The 3-Class Petroleum Framework
PESO classifies petroleum by flash point. Lower flash point = more dangerous = stricter licensing. Diesel on Indian construction sites sits in Class B. Knowing all three matters because sites also hold kerosene, furnace oil, and occasionally petrol. Sign up free to keep a class-tagged register of all petroleum on your site.
A
FLASH PT. < 23°C
Class A · Highly Volatile
Petrol (MS) · Naphtha · MTO
Site use: Rare. Site vehicles, petrol generators
Strictest licensing · Low threshold
B
FLASH PT. 23 – 65°C
Class B · Diesel · The Construction Case
Diesel (HSD) · Kerosene (SKO)
Site use: Standard. Equipment · DG sets · Bowsers
Per quantity slabs · See decision cascade
C
FLASH PT. 65 – 93°C
Class C · Heavy Fuel
Furnace Oil (FO) · LDO
Site use: Hot mix plants · Asphalt plants · Boilers
Exempt < 45 KL · Licensed > 45 KL
×
FLASH PT. > 93°C
Excluded · Outside PESO Scope
Bitumen · Heavy lubricants
Site use: Bituminous works · Pavement
No PESO licence — but environmental rules may apply
The 5-Stage Licensing Journey
Getting a PESO licence is a sequential 60–120 day process. Each stage must close before the next begins; submitting incomplete papers at any stage rewinds the clock. The journey is identical for greenfield EPC camps, NHAI project depots, and city-side industrial construction sites. Book a demo to track each stage's documentation on HVI.
1
Day 1–15
Site Approval
Submit site layout, plot dimensions, surrounding land use, tank position to regional PESO office. Scrutiny fee paid per Rule 13.
Output: Preliminary site sanction
2
Day 15–40
Drawing & Specs
Engineering drawings of tank, bunding, vents, dips, fill points, fire-fighting, flameproof electricals submitted. All Ex-rated equipment must be CCE-approved.
Output: Approved drawings (PESO-signed)
3
Day 40–70
DC & Police NOC
District Collector NOC confirms no public safety conflict. Police NOC confirms no security objection. Schools, hospitals, residential vicinity = longest stage.
Output: Two NOC letters
4
Day 70–100
PESO Inspection
Inspector visits with approved drawings. Verifies installation, bunding ≥110% capacity, safety distances, flameproof electricals, fire-fighting, earthing per IS 3043.
Output: Inspection report
5
Day 100–120
Licence Granted
PESO issues Form XIV (own use) or Form XV (dispensing). 3-year validity, renewable. Site must display licence at storage premises. Renewal application 30 days pre-expiry.
Output: Form XIV / XV Licence
Safety Distance Reference Matrix
Minimum safety distances are the technical heart of every PESO inspection — measured between the diesel tank and surrounding features. Distances depend on tank capacity and what's measured against. Reference values for above-ground HSD tanks below; verify with your PESO consultant for exact case.
Capacity
Boundary
Building
Road
Ignition
≤ 5 KL
3 m
4.5 m
6 m
9 m
5–10 KL
4.5 m
6 m
9 m
15 m
10–25 KL
6 m
9 m
12 m
15 m
25–45 KL
9 m
12 m
15 m
15 m
Indicative reference for Class B (HSD) above-ground tanks · Verify with PESO consultant
Inspector Scenarios — What If?
Real construction sites have edge cases that aren't covered by simple thresholds. Click each scenario tab below to see how PESO treats the case — and what the EHS lead needs to do. Book a demo to walk through your site's specific edge cases.
LICENCE REQUIRED
Three DG sets, 2,000 L day tank each — aggregate 6,000 L on premises
The trap: Each individual tank is under 5,000 L, so the project manager believes no licence is needed. PESO does not work that way. Aggregate premises quantity is the test — 3 × 2,000 = 6,000 L exceeds the 5,000 L exemption threshold. Form XIV licence is mandatory.
Action: Apply for Form XIV immediately. Until grant, expect any PESO surprise visit or District Collector inspection to trigger a stop-work notice. Aggregate counting includes tanker bowsers parked on site if they spend more than transit time.
FORM XV — NOT FORM XIV
Single 4,500 L DG day tank, but operator also fills site pickup trucks from it
The trap: Tank is under 5,000 L for storage exemption, but the moment fuel leaves the tank to refuel anything other than the DG set itself, the installation becomes a dispensing point. Form XV licence is required regardless of tank capacity.
Action: Either stop the dispensing (DG tank fuels DG only) or apply for Form XV. Many EPC sites unknowingly cross this line by allowing supervisors' vehicles to "top up" from the DG tank — every such transaction is technically a dispensing event under PR 2002.
VERIFY SAFETY DISTANCE
20,000 L above-ground tank, 5 metres from the site boundary wall
The trap: Quantity correctly triggers Form XIV licensing — but the safety distance for a 10–25 KL tank to plot boundary is minimum 6 metres. At 5 m, the tank fails Stage 4 PESO inspection. Approval gets withheld at drawing stage if site layout shows this distance.
Action: Either relocate the tank inside the plot to achieve ≥ 6 m, build a fire-rated wall barrier as compensatory measure, or reduce tank capacity to ≤ 10 KL where 4.5 m distance applies. Resolve before submitting Stage 2 drawings — fixing post-approval requires Rule 146 alteration application.
EXEMPT — INTIMATE ONLY
30 KL furnace oil tank for hot mix plant on NHAI highway project
The case: Furnace Oil (FO) is Class C, flash point above 65°C. Class C product storage below 45 KL is exempt from PESO licensing per Chapter VI of PR 2002. The hot mix plant operator only needs to intimate the District Authority and follow safe storage practice.
Action: File the intimation, maintain the storage in proven containers, follow standard fire safety. However — if the same site also has more than 5,000 L of diesel (Class B), the diesel installation needs Form XIV independently. Class exemptions apply per-class, not site-wide.
The Documentation Folder
The first thing every PESO inspector and District Collector officer asks: "Show me your documents folder." What's missing becomes the focus of the inspection. Maintain these four document categories at the storage premises at all times.
A · LICENSING
Original PESO Licence (Form XIV or XV)
Approved Site Layout Drawing
Approved Tank Specification Drawing
District Collector NOC
Police NOC
Renewal Correspondence
B · EQUIPMENT
Tank Fabrication Test Certificate
Hydrostatic Test Report
Flameproof Electrical Certifications (CCE)
Earthing Test Report (Annual · IS 3043)
Lightning Protection Report
Bunding Wall Inspection Record
C · OPERATIONS
Daily Stock Register (Receipts / Issues)
Daily Diesel Intake Reading Log
Periodic Dip / Level Measurement
DG Fuel Transfer Log
Bowser Refuelling Log (if applicable)
Returns Submitted to PESO
D · SAFETY
Fire-Fighting Equipment Inspection Log
Spill Response Procedure (Displayed)
Operator Training Records
Emergency Contact List (Displayed)
Mock Drill Records (Half-yearly)
Near-Miss / Incident Log
Penalty Matrix — What Non-Compliance Actually Costs
Operating outside PESO compliance is not a paper penalty. The consequences cascade from technical to commercial to personal. Reference grid below shows the actual exposure under Petroleum Act 1934 and downstream contractual terms. Sign up free to keep compliance visibility live across every site.
LEVEL 1
Operating without licence
Fine under Section 23 · imprisonment up to 1 month for responsible person · confiscation of petroleum and storage equipment
Petroleum Act 1934 · Sec 23
LEVEL 2
District Collector stop-work order
Construction activity dependent on diesel halted · paving, concreting, earthmoving stop · typical duration 7–21 days until licence granted
DC office · Local exec power
LEVEL 3
Liquidated damages from client
NHAI / EPC / state PWD contracts include LD per day of delay · typically 0.05–0.1 % of contract value per day · plus EOT denial
Contract terms · GC clauses
LEVEL 4
Negative safety record · future bids
Safety non-compliance flag in NHAI / govt bid evaluation systems · disqualification or scoring penalty in future tender bids
NHAI bid manual · Tender QC
FIELD REPORT
Case File · Central India Highway Project · 2024
Premises: 38 km NH4 widening project · main camp + 3 work fronts Installation: 2× refuelling bowsers · 1× 20 KL above-ground tank · 3× DG sets (250 kVA + 2 × 125 kVA) Trigger: Surprise District Collector inspection following unrelated village complaint
The project manager believed individual DG tanks under 5 KL each were exempt. Aggregate diesel quantity on premises — main tank + bowsers + 3 DG day tanks — exceeded 30 KL. Site issued 14-day stop-work notice. PESO Form XIV applied for and granted in 76 days. Section 23 penalty paid. Roughly 3 weeks of paving work lost in liquidated damages downstream.
Key learning: Aggregate premises quantity is the licensing test, never individual tank size. Every NHAI / EPC project should treat PESO Form XIV as a Day 1 procurement deliverable — not a Day 90 catch-up.
— Project Manager & Former EHS Lead, Highway EPC, Central India
Quick Reference Q&A
When does my construction site need a PESO licence?
Any one of three triggers: aggregate diesel storage on premises (all tanks plus DG day tanks combined) exceeds 5,000 L for own-consumption use; any fuel is dispensed beyond own consumption regardless of quantity (Form XV); or any single tank exceeds 45 KL (Form XIV plus MSIHC Rules 1989 obligations). Aggregate counting is the most common trap on Indian sites.
What's the difference between Form XIV, Form XV, and Form XI?
Form XIV is for own-consumption storage (your equipment, your DG sets, internal refuelling). Form XV is for storage plus dispensing — fuel stations, fleet refuelling depots, or any site where fuel leaves the premises in another vehicle's tank. Form XI is the transport licence for moving Class A or B petroleum in bulk between locations — required for your refuelling bowsers if they move on public roads.
What does a PESO inspection actually look like on site?
Three sequential actions: (1) document folder review — original licence, approved drawings, NOCs, daily stock register, fire-fighting and earthing reports; (2) physical walk verifying tank position matches drawing, measuring safety distances, checking bunding, confirming flameproof electricals, testing fire-fighting and earthing; (3) operational Q&A with the diesel handler and EHS lead on spill response, refuelling SOP, DG transfer procedure. Findings recorded in inspection report — major findings trigger licence suspension under Rule 156 of PR 2002.
What does HVI provide for ongoing PESO compliance?
HVI handles post-licence compliance — what happens daily after the licence is granted. The daily diesel stock register captured digitally with photo proof of dip readings. Fire-fighting, earthing, and electrical inspections scheduled, photographed, stored against each tank. Licence expiry alerts at 30 / 15 / 7 days before renewal due date. The full document folder lives in one place auditors can be walked through in minutes rather than days. PESO inspectors accept the HVI inspection trail as contemporaneous record during physical visits.
RUN PESO COMPLIANCE DIGITALLY · ACROSS EVERY SITE
Indian construction, EPC, infrastructure, and industrial fleets keep PESO compliance audit-ready on HVI — daily stock logs, dip readings, fire-fighting trails, earthing reports, expiry alerts.
