New Delhi, Aug 29: The government has moved to address concerns over the revised pricing of Compressed Biogas (CBG), saying the change is unlikely to have a significant impact on people who use CNG for transport or PNG for household cooking.
The clarification comes after concerns that a sharp increase in the price paid to CBG producers could eventually make gas more expensive for consumers. The Ministry of Petroleum and Natural Gas, however, said the procurement price for CBG should not be confused with the retail price paid by CNG motorists or PNG households.
Under the revised GOBARdhan framework, the CBG procurement price has been fixed at ₹2,110 per MMBtu, compared with the earlier level of around ₹1,478 per MMBtu. This represents an increase of about 43 per cent in the amount paid to CBG producers.
The government said the increase will be partly offset through ₹10 per kg of CBG in affordability support, equivalent to about ₹215 per MMBtu for CBG containing 95 per cent methane. After taking this support into account, the effective cost to be recovered from the gas consumer base would be around ₹1,895 per MMBtu.
Another important change is the way the cost will be distributed. CBG will be pooled with other domestically produced natural gas instead of the additional cost being concentrated among a relatively small group of CNG and household PNG users.
The government estimates that the domestic gas pool under the revised arrangement will be around 2.5 to three times larger than the earlier base. This wider pool is expected to spread the additional cost and limit the effect on individual consumers.
For households, the immediate concern is whether the change could make cooking through PNG more expensive. The government's position is that the revised CBG procurement rate will not automatically translate into a similar increase in household gas bills.
CNG users, including daily commuters, taxi operators, auto-rickshaw drivers and commercial vehicle owners, are also unlikely to face a direct price impact solely because of the revised CBG procurement rate. However, retail CNG prices can also be influenced by other factors, including the cost of imported gas and wider market conditions.
For CBG producers, the new pricing structure could provide greater financial certainty. A stable procurement price can make it easier for companies to plan investments, secure financing and develop facilities that convert agricultural residue, cattle waste and other organic material into usable gas.
The policy could therefore create opportunities across the wider waste-to-energy sector. More CBG projects could generate demand for waste collection, transportation, processing equipment and related services, while giving businesses an opportunity to turn organic waste into a commercially useful energy resource.
The government's approach also reflects a broader effort to expand India's domestic gas supply and encourage cleaner alternatives to conventional fossil fuels. The GOBARdhan framework is designed to support CBG production while providing producers with greater revenue visibility.
For consumers, the key takeaway is that the 43 per cent increase in the CBG procurement price is not equivalent to a 43 per cent increase in CNG or PNG prices. The government support and wider gas pool are intended to absorb much of the additional cost.
The actual impact on retail prices will ultimately depend on how the revised framework works in practice and how gas distributors manage their overall procurement costs.
The new system is therefore aimed at striking a balance between two priorities: giving CBG producers enough certainty to expand production while keeping the additional burden on ordinary CNG and PNG users to a minimum.
