PESO Approval for LDO Storage: Complete Licence & Compliance Guide

• PESO Approval for LDO Storage comes under the Petroleum Rules, 2002, and the particular condition shall depend on the volume and type of storage of LDOs.
• According to PESO, Light Diesel Oil (LDO) falls under petroleum Class C and says that bulk storage up to 45,000 liters does not need a license, while any storage above 5,000 liters will need reporting in accordance with Rule 140.
• In case of large-scale storage facilities, the procedure would include the proper license route, site and tank information, technical drawings, safety measures, and filing of the application.

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Introduction

In this case, even though the facility has an existing LDO tank, a boundary wall and the fuel transfer facilities working fine, there may still be confusion about the regulatory stance.

This is because there is a tendency to think that as long as there is an existing LDO tank that looks good enough, then there shouldn’t be any problem.

The fact of the matter is that whether PESO Approval for LDO Storage is needed or not will depend on the classification of the petroleum, quantity being stored, storage arrangements and also the provisions of the Petroleum Rules, 2002.

LDO, or Light Diesel Oil, has been explicitly mentioned in the PESO’s guidance document as one of those petroleum products that requires regulation and is classified as Petroleum Class C in their document.

So, the question for a storage facility operator cannot be “Do I require a PESO licence?” It must be:

How much LDO is being stored and how?

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What Is PESO Approval for LDO Storage?

Approval of PESO for LDO Storage is the appropriate permission/licence/regulatory compliance needed for storing Light Diesel Oil under the Petroleum Rules, 2002.

PESO stands for the Petroleum & Explosives Safety Organisation. It operates under the Department for Promotion of Industry and Internal Trade (DPIIT) which comes under the Ministry of Commerce and Industry, Government of India.

The Petroleum Rules, 2002 are the regulations for import, transportation, storage, production, refining and blending of petroleum. The present guidelines of PESO have clarified that LDO falls within the category of petroleum products under the licensing regime for storage.

But there is one thing about LDO which makes it distinctive.

According to the Frequently Asked Question (FAQs) of PESO, no licence is needed for the storage and transport of Furnace Oil/LDO classified as petroleum Class C provided the volume at one place does not exceed 45,000 liters in bulk. Also, in case the volume of Class C storage exceeds 5,000 litres, prior permission in the form of a report under Rule 140 is needed.

Therefore, it is not always necessary for the LDO operator to think that all storage tanks require the same license from PESO.

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Is PESO Licence Required for LDO Storage?

This is one of the most critical issues for LDO storage facilities.

Based on the PESO FAQ:

• LDO falls within the class of Petroleum Class C.
• No licensing is required for bulk storage of Petroleum Class C up to 45,000 litres.
• Reporting in accordance with Rule 140 is required where Class C storage is more than 5,000 litres.
• The precise regulatory route can be determined based on the actual storage arrangement and regulatory requirement under the Petroleum Rules.
• Thus, the LDO storage facility would need to determine the total quantity at the premises first rather than assessing the capacity of just one tank.

For instance, where there is more than one tank of LDO at the premises, the applicability needs to be assessed taking into account the storage arrangement and regulatory requirement.

That is why applicability assessment is helpful at this stage because otherwise, the operator might apply for the incorrect authorization or alternatively, may assume that nothing needs to be done from the regulatory point of view.

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Why Is LDO Storage Regulated?

LDO is widely used as fuel for boilers, furnaces, generators and other equipment. Even though LDO has different handling qualities than volatile products from the petroleum family, it is still petroleum and should be stored in a controlled manner.

Specific risks are:

• Fire hazard
• Spills and leaks
• Unsafe transfer operations
• Ignition sources
• Condition of tanks
• Unsatisfactory pipe installation
• Insufficient fire protection arrangements
• Poor housekeeping in storage areas

The Petroleum Rules have specific articles regarding fire protection in petroleum storage installations. It is prohibited to smoke or use ignition sources in installations and storage areas, except those that are specially approved.

For an operator this implies that compliance discussion should not end up with getting proper documents The tank, transfer system, operational practices and site arrangements should meet the safety requirements that are outlined in the application.

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What Does PESO Check for an LDO Storage Facility?

• There is no single document or drawing that establishes complete compliance.
• PESO’s assessment can involve the relationship between the proposed storage quantity, premises, tanks, layout, safety arrangements and supporting documentation.

Storage Quantity

• The first consideration is the amount of LDO proposed to be stored.
• The quantity determines which provisions and thresholds become relevant. It should therefore be clearly stated in the application and supporting documents.

Tank Details

The operator should maintain clear information about the storage tank, including applicable:

• Capacity
• Dimensions
• Material of construction
• Tank identification
• Design details
• Testing information
• Installation arrangement
• Associated fittings

Site Layout

The site drawing should clearly represent the actual facility.

Depending on the project, the layout may need to show:

• LDO storage tanks
• Transfer area
• Pump arrangement
• Piping
• Buildings
• Access roads
• Boundary
• Fire-fighting arrangements
• Nearby installations
• Relevant safety distances

The drawing should not be treated as a decorative attachment to the application.

It is one of the documents through which the authority understands the physical arrangement of the facility.

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Documents Required for PESO Approval for LDO Storage

The specific documentation would depend upon the specific approval/permission route that applies. But it would help if you were ready to sort out project documents in terms of technical and legal documentation.

Company Documents

These can include:

• Company registration
• PAN
• Authorisation of applicant
• Title/lease
• Applicant ID
• Authorised Signatory

Land & Site Documents

These could include relevant land documents as per the requirement of the application, which proves ownership/control of the proposed site.

Among the list of documents published by PESO in its FAQ on petroleum installations, the relevant land documents, incorporation documents, declaration by the applicant and others are included.

Technical Documents

The technical package may include:

• Tank specifications
• Tank drawings
• Capacity details
• Piping layout
• Equipment details
• Pump information
• Safety arrangements
• Fire protection details
• Testing certificates
• Competent-person certificates, where applicable

PESO Application Documents

The appropriate procedure for application for PESO should be determined prior to making the application.

According to PESO’s Forms List, Form IX is the form of application for the grant, amendment, renewal or transfer of a licence for the importation and storage of petroleum.

Nevertheless, PESO’s present SOP states that each petroleum activity is related to a different form. For instance, Form XV applies to importation and storage of petroleum in an installation, whereas Form XVI applies to some petroleum storage other than in bulk.

It is crucial.

One cannot choose any form simply because the form states “storage of petroleum”. The activity itself and installation must be mapped out to the right licensing route.

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PESO Approval for LDO Storage: Application Process

The application should be considered more of a technical process than a paperwork process.

Step 1: Evaluating LDO Storage Capacity

Considerations begin from the product, quantity, tank volume, number of tanks, and storage configuration It needs to be determined whether the quantity is within the threshold or exemption that requires the license.

Step 2: Checking the Facility

In the case where the tank has been installed, evaluate the physical site versus the available drawings Is the plan submitted true to?

• Tank location
• Piping
• Pumps
• Access
• Fire safety provisions
• Buildings
• Boundary
• Storage capacity

Step 3: Technical Drawings

Technical drawings shall be made/checked by the respective technical expert The mistake here may be submission of an older drawing as it has been used earlier without taking into consideration that it may have changed in the actual installation.

Step 4: Documentation of Other Related Information

Compile all documentation related to the company, land, equipment, testing, and safety Consistency of information like name, address, capacity of tanks etc should be maintained throughout the documentation.

Step 5: Submission of the Application

PESO application as per requirements, documentation, and fee should be filed The SOP issued by PESO for approvals and licenses of petroleum rules, 2002 must be referred to at the time of preparing the application.

Step 6: Regulatory Queries

If PESO queries on the file then the response should answer the technical question raised If any drawing is rectified then other documents should also be checked. It will not be desirable to give a correct page and have contradicting information in other documents.

Step 7: Inspection or Verification

• In case it is necessary, there can be an inspection carried out or technical compliance must be shown.
• The operator needs to make sure that the physical installation is in accordance with the submitted drawings and documentation.

Step 8: Preserve the Documentation of Final Approval

• After obtaining the required permission or license, keep all relevant information.
• It will be helpful in future inspections, modifications, and renewal of permissions.

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Common Mistakes in LDO Storage Applications

Using the Incorrect Category of Licensing

• There are various forms and approvals in petroleum regulation.
• Use of an incorrect form without determining the type of storage will mislead the licensing process.

Displaying an Incorrect Tank Capacity

• The capacity of the tank on drawings, datasheets, and application must be the same.
• Even a minor difference in numbers may prompt queries.

Submission of Outdated Drawings

• Old drawings may depict a tank in one position where in reality there has been change in the installation.
• The regulatory application must reflect the new layout.

Considering the Tanks in Isolation Without Considering Storage

• The operators sometimes tend to consider individual tanks without considering the complete storage facility.
• The capacity and threshold criteria must be carefully analyzed.

Using the Safety Aspects as After thoughts

Arrangements for firefighting, access, safety provisions and operations should be kept in mind at the time of planning the facilities.

Lack of Preparation for Inspection

Even a proper documentation of the application may create problems if there is a difference between the actual installation and the plan.

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LDO Storage Tank Safety and Compliance

A compliant LDO storage area should be designed and operated with the nature of the product in mind.

The operator should pay attention to:

• Tank condition
• Leak prevention
• Transfer connections
• Proper valves
• Safe piping
• Fire protection
• Access for emergency response
• Electrical safety
• Ignition-source control
• Housekeeping
• Spill management
• Emergency procedures

The Petroleum Rules, 2002 contain specific provisions concerning fire precautions and safe petroleum storage The exact engineering requirements should be determined for the particular facility rather than copied from another installation.

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What Happens If LDO Storage Is Not Properly Compliant?

It depends on the particular regulatory case and the corresponding legal requirements.

From a practical standpoint, though, it may lead to some difficulties in case of inspection, expansion, amendment, audit, or other dealings with authorities.

It may even become costly if an operator needs to redesign the current layout of tanks after construction.

That is the reason why one should think about compliance before the actual implementation of the project, especially in the process of setting up a new storage facility In the case of an already existing facility, it makes sense to carry out the gap analysis at the very beginning.

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What Is the Cost of PESO Approval for LDO Storage?

There is no single fixed consultancy or project cost for every LDO facility.

The overall expense can depend on:

• Storage quantity
• Number of tanks
• Type of installation
• Applicable licensing route
• Condition of existing documentation
• Engineering drawing requirements
• Testing and certification
• Inspection requirements
• Government fees
• Professional consultancy charges

For an existing facility, the cost can also increase if drawings have to be recreated or the installation requires corrective work. A project-specific estimate is therefore more useful than quoting a generic amount.

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How Long Does LDO Storage Approval Take?

The timeline depends on the applicable approval route, completeness of documents, technical scrutiny, inspection requirements and response time for queries.

PESO maintains an official SOP for approvals and licences issued under the Petroleum Rules, 2002.

For planning purposes, operators should not work backwards from an assumed fixed approval period. It is better to complete the technical documentation first and identify regulatory dependencies before committing to an operational start date.

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Is LDO A Class C Petroleum Product?

Yes. PESO’s published storage guidance identifies Light Diesel Oil (LDO) as Petroleum Class C. Class C petroleum is defined as petroleum having a flash point of 65°C and above but below 93°C.

The classification matters because the Petroleum Rules establish different requirements and exemptions based on petroleum class and quantity.

Operators should use the actual product specification and applicable regulatory classification rather than relying only on the commercial name “LDO.”

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How Diligence Certification Helps With LDO Storage Compliance

For a storage facility operator, the difficult part is often not the application form. It is understanding which documents, drawings and regulatory requirements actually apply to the facility.

Diligence Certification can assist with:

• PESO applicability assessment
• Licence category identification
• Documentation review
• Technical drawing coordination
• Application preparation
• Filing assistance
• Regulatory query responses
• Inspection coordination
• Renewal and amendment support

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Conclusion

Approval of LDO Storage by PESO should start with an assessment of applicability rather than with the application itself.

LDO falls under Class C of Petroleum as defined by PESO, and the regulation depends on the quantity and method of storage. The rule made by PESO specifies that Class C bulk storage up to 45,000 litres is covered under no-licence category, while storage more than 5,000 litres needs to be reported under Rule 140.

In order to be safe, a storage facility owner should consider the quantity of LDO, capacity of the tank, layout of the facility, technical and safety provisions together, and then make a conclusion about the applicable licensing.

If you are planning to set up, expand or regularise your LDO storage facility, Diligence Certification can help you in assessing the requirements and preparing the documentation.

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Frequently Asked Questions