The Ministry of Petroleum & Natural Gas issued a clarification regarding revised Compressed Biogas (CBG) pricing under the GOBARdhan Scheme, countering media reports suggesting significant additional burden on CNG and household PNG consumers. The Ministry states that the procurement price paid to CBG producers has been fixed at ₹2,110 per MMBtu, representing a 43% increase from the previous price of approximately ₹1,478 per MMBtu which was linked to 85% of the retail selling price of CNG.
However, the government will provide affordability support of ₹10 per kg of CBG, equivalent to approximately ₹215 per MMBtu for CBG with 95% methane content. This support is government-funded and not fully recovered from gas consumers, reducing the effective CBG cost to approximately ₹1,895 per MMBtu - representing an effective increase of about 28% rather than 43%.
Critically, CBG is not sold at its procurement price to City Gas Distribution (CGD) entities but is pooled with other domestically produced natural gas. Under the new framework, the net cost of CBG will be spread across a domestic gas base approximately 2.5 to 3 times larger than the previous base, which earlier only included the limited quantity of APM gas allocated to CNG (Transport) and PNG (Domestic) segments. This substantial expansion of the gas pooling mechanism ensures that the price impact on individual gas consumers will be negligible.
The revised pricing framework is designed to balance two objectives: providing CBG producers with a stable and viable price that enables plants to operate sustainably, while using government-funded affordability support and a substantially wider gas pool to protect consumers from any material price impact.