Government Rejects Concerns Over CBG Price Hike Impact on Gas Consumers

The Ministry of Petroleum and Natural Gas has rejected concerns that the revised price of Compressed Biogas (CBG) under the GOBARdhan Scheme will significantly burden CNG and household PNG consumers. The ministry claims its assessment is based on inconsistent assumptions.

Under the revised framework, the CBG procurement price has been fixed at Rs 2,110 per MMBtu, a 43% increase over the prevailing price. However, this is 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 reduce the amount that needs to be recovered through gas consumers.

After accounting for the government support, the effective CBG cost to be recovered through gas consumers would be around Rs 1,895 per MMBtu, a 28% increase over the prevailing price. This is significantly lower than the headline increase in the procurement price.