PESO Licence for Diesel & Hazardous Storage in Factories: Thresholds, Drawings & Process

Most approvals in a factory project are state approvals with familiar local offices. PESO is different: a central regulator — the Petroleum and Explosives Safety Organisation — licensing the most unforgiving materials on your site: fuel, gas and solvents. It is also, consistently, one of the longest-lead approvals in the entire sequence, because it involves approved drawings, a district-administration NOC and a physical inspection, in series.

This guide covers when a factory needs PESO, the licence types that matter to industry (diesel/HSD storage, LPG/propane installations, compressed gases, solvents), the drawing-first process, safety-distance logic, and the timeline reality. It expands Phase 5 of the complete factory approvals roadmap.

The scheduling rule: if your plant stores fuel or gas above small quantities, open the PESO track the day the site layout is drafted — because safety distances are a layout input, and the licence lead time is measured in months, not weeks.

What PESO regulates on a factory site

PESO administers the central statutes governing dangerous substances — chiefly the Petroleum Act 1934 and Petroleum Rules 2002, the Explosives Act 1884 with the Gas Cylinder Rules and the Static & Mobile Pressure Vessels (SMPV) Rules, and allied regimes. On an ordinary factory site, that translates to:

Installation	Regime	Typical industrial examples
Diesel/HSD bulk storage	Petroleum Act + Rules	DG-set fuel tanks, boiler fuel, captive dispensing
Other petroleum products	Petroleum classes A/B/C by flash point	Solvents, thinners, furnace oil
LPG / propane installations	SMPV / gas rules	Burner fuel for ovens, furnaces, canteens; bulk LPG bullets
Compressed gas cylinders	Gas Cylinder Rules	Oxygen/acetylene for cutting, nitrogen, hydrogen
Explosives	Explosives Rules	Rare in general industry; quarrying/specialised use

The class logic for petroleum: products are classed by flash point — Class A the most volatile, through B, to C — and the storage rules scale with the class and the quantity. Small quantities are exempt from licensing (the Rules set class-wise thresholds and receptacle conditions); a factory’s bulk diesel for DG sets and boilers is exactly the kind of storage that crosses them. Check your actual products and volumes against the current Rules — the classification of the product and the aggregate quantity on site decide everything.

The process — drawings, NOC, licence, in series

PESO’s sequence has more moving parts than most approvals, and they are sequential:

Site & layout planning — the storage installation is placed per the Rules’ safety distances: from buildings, boundaries, roads, other storages and ignition sources. This is why PESO starts with the site plan — a tank placed casually is a tank you will move.
Drawing approval — site plan and installation drawings (tank, dyke, vents, earthing, pumps/dispensing, fire-fighting provision) submitted to the PESO circle office for prior approval.
District authority NOC — the District Magistrate/administration’s no-objection for the storage — PESO’s licence rides on it, and this step carries its own local timeline.
Construction to approved drawings — the tank farm/dyke/gas installation built exactly as approved, by competent agencies, with test certificates.
Inspection & licence grant — PESO (or authorised machinery) verifies the installation; the licence issues in the applicable form, for the licensed capacity, with conditions.
Renewal & amendment — licences run on multi-year renewal cycles; capacity changes, layout changes or product changes need prior amendment.

Realistic timeline: 2–6 months end to end — the district NOC and inspection scheduling are the variable segments. This is the long pole that justifies the pillar’s advice: start PESO early, in parallel with construction, never after it.

What the installation must get right

Safety distances — the non-negotiable core: prescribed clearances from buildings, boundaries, public roads and other hazardous storages, scaled by class and quantity. They consume real plot area; discover them at layout stage, not licence stage.
Dyke enclosures for bulk liquid tanks — containment sized to the Rules, with sealed floors and controlled drainage
Venting and earthing — proper vents, flame arrestors where applicable, and recorded earthing/bonding of tanks and transfer points
Approved equipment — tanks, fittings and dispensing units per the applicable standards; test certificates retained for inspection
Fire-fighting provision — extinguishers and, at larger installations, hydrant/foam provisions coordinated with the site’s overall fire scheme
Signage and licensing furniture — the licence conditions specify markings, danger boards and record-keeping at the installation

Coordination note: the PESO installation must appear — identically — on the site plan the fire service approves, the plan DISH sees, and the drawing PESO stamps. Three regulators, one tank: any disagreement between drawings is a found defect at somebody’s inspection.

LPG, gases and the non-diesel cases

Bulk LPG/propane (bullets, vaporisers, manifolds) for furnaces and ovens falls under the SMPV/gas regime — safety distances, approved fabricators, hydrotest records and licensing before commissioning. Industrial conversions from liquid fuel to LPG (common under NCR fuel regimes) must budget this track.
Cylinder storage — oxygen/acetylene and other cylinders above small numbers need compliant storage (segregation, ventilation, security) and licensing at threshold quantities under the Gas Cylinder Rules.
Solvent stores — Class A/B liquids in drums cross licensing thresholds faster than teams expect; a paint shop’s monthly solvent stock is worth an early check.

Common mistakes

Starting PESO last — the 2–6 month track discovered two months before commissioning is the classic self-inflicted delay.
Placing the tank where space remained — safety distances are layout inputs; retrofitting them means moving the tank or the building.
Skipping the district-NOC lead time — it is a real step with a real clock, not a formality inside PESO’s own timeline.
Uncertified fabrication — tanks and pressure vessels without proper test certificates stall at inspection regardless of build quality.
Capacity creep — adding a second tank or upgrading a bullet without amendment; the licence caps what may lawfully exist on site.
Divergent drawings across regulators — the tank on the PESO drawing must match the fire and factory plans exactly.

Frequently asked questions

When does a factory need a PESO licence?

When it stores petroleum products, LPG/compressed gases or other regulated substances above the exemption thresholds in the applicable Rules — bulk diesel for DG sets/boilers, LPG installations and sizeable solvent stores being the common industrial triggers. Verify your products and aggregate quantities against the current Rules.

Is a licence needed for a DG set’s diesel tank?

Small integral/day tanks within exempt quantities generally don’t need one; bulk storage beyond the class-wise thresholds does. Aggregate all diesel on site — multiple small tanks don’t launder a licensable total.

Who issues the licence?

PESO — the central Petroleum and Explosives Safety Organisation — through its circle offices, with a district-administration NOC as part of the chain.

What are petroleum Classes A, B and C?

Flash-point-based classes — Class A the most volatile (lowest flash point), then B, then C. Storage requirements and licensing thresholds scale with class and quantity; classify your actual products from their data sheets.

What is the process?

Layout per safety distances → PESO drawing approval → district NOC → construction to approved drawings → inspection → licence. In series — which is why it is among the longest approvals.

How long does it take?

Indicatively 2–6 months end to end, dominated by the district NOC and inspection scheduling. Start it with the site layout, in parallel with construction.

What are safety distances?

Prescribed minimum clearances between the storage and buildings, boundaries, roads and other storages, scaled by class and quantity. They are the reason PESO planning begins with the site plan.

What drawings does PESO need?

Site plan showing the installation and distances, plus installation drawings — tank/dyke details, vents, earthing, transfer/dispensing arrangements and fire provisions — for prior approval before construction.

Does the licence expire?

Licences run on renewal cycles (multi-year options exist) and remain valid only for the licensed capacity, layout and products. Amend before you change anything material.

How does PESO interact with the Fire NOC?

The storage appears in both schemes: PESO licenses the installation, the fire service approves the site’s overall fire strategy including it. One consistent drawing set across PESO, fire and DISH is the practical requirement.

What happens if I store fuel without a licence?

Unlicensed storage of regulated substances is an offence under the central Acts — with the practical consequences arriving even sooner: insurers, auditors, the fire inspection and the CTO file all surface it.

Who should run the PESO track?

Whoever owns the site layout and the fire scheme — the safety distances, dyke design, earthing and fire provisions are engineering scope. We run it inside the overall approvals sequence so the long pole starts first.

Put the long pole first

Request a Budgetary Proposal / Compliance Audit — we flag PESO applicability from your fuel and process list, and sequence it with everything else
Fire-fighting Systems — tank-farm and installation fire protection, designed with the PESO drawings
The complete factory approvals roadmap — the full 16-step sequence

Secured Engineers Pvt. Ltd. is an MEPF EPC contractor — 535+ projects across 18+ states, ISO 9001:2015. This guide is general information, not legal advice; licensing thresholds, forms and conditions live in the current central Rules — verify your specific products and quantities against them and with the PESO circle office.