Government Revises CBG Pricing, Promises Minimal Impact on Gas Users

The Indian government has clarified that the revised compressed biogas (CBG) pricing under the GOBARdhan scheme will not significantly impact gas users, as the cost will be spread over a wider pool and the government will fund affordability support.

Under the existing system, CBG producers were paid 85% of the retail selling price of compressed natural gas (CNG), which worked out to Rs 1,478 per million British thermal units (MMBtu). However, with the revised pricing under GOBARdhan, the procurement price for CBG has been fixed at Rs 2,110 per MMBtu.

The ministry stated that the full price of Rs 2,110 per MMBtu will not be recovered through gas consumers. Instead, the government will provide affordability support of Rs 10 per kg of CBG, equivalent to Rs 215 per MMBtu for CBG with 95% methane content.

This support will be funded by the government and will not be recovered from gas consumers entirely. Therefore, the effective CBG cost to be recovered through a wide group of gas consumers will be approximately Rs 1,895 per MMBtu, which is an increase of around 28% compared to the prevailing CBG price.