India Introduces Revised CBG Pricing Framework to Balance Producer Viability and Consumer Affordability

The Indian Ministry of Petroleum and Natural Gas has introduced revised pricing for Compressed Biogas (CBG) under the GOBARdhan Scheme. The new framework aims to provide a stable price to producers while keeping the impact on CNG and household PNG consumers negligible.

Under the existing system, CBG producers are paid 85% of the retail selling price of CNG, which works out to around Rs 1,478 per one million British thermal units (MMBtu). The revised GOBARdhan framework fixes the CBG price at Rs 2,110 per MMBtu, an increase of about 43%. However, this is the procurement price paid to 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 around Rs 215 per MMBtu for CBG with 95% methane content. After accounting for this support, the effective CBG cost to be recovered through gas consumers would be around Rs 1,895 per MMBtu, or about 28% higher than the prevailing price.