CBG Price Hike to Have Negligible Impact on CNG, PNG Consumers

The Indian government has rejected concerns that the revised Compressed Biogas (CBG) pricing under the GOBARdhan Scheme will significantly increase costs for CNG and household PNG consumers.

The Ministry of Petroleum and Natural Gas said the assessment is based on inconsistent assumptions, and the existing pricing mechanism links the price paid to CBG producers to 85% of the retail selling price of CNG. The latest revision translates into a CBG procurement price of around Rs 1,478 per MMBtu.

Under the revised GOBARdhan framework, the CBG procurement price has been fixed at Rs 2,110 per MMBtu, representing an increase of around 43% over the prevailing price. However, this is the procurement price paid to CBG producers and not the price directly paid by CNG or household PNG consumers.

The government will provide affordability support of Rs 10 per kg of CBG, equivalent to approximately Rs 215 per MMBtu for CBG containing 95% methane. This support will be funded by the government and will reduce the amount that needs to be recovered from gas consumers.