Revised CBG Pricing in India Sees 43% Increase but Gas Consumers Protected

The Ministry of Petroleum and Natural Gas has clarified that revised compressed biogas (CBG) pricing under the Gobardhan scheme will support producers without significantly impacting gas consumers. The government will fund affordability support and spread the cost over a wider pool.

Under the existing system, CBG producers are paid 85% of the retail selling price of compressed natural gas (CNG). However, with the latest revision, this works out to be ₹2,110 per million British thermal units (mmbtu), a 43% increase from ₹1,478 per mmbtu. The ministry stated that it would not recover the full price from gas consumers.

The government will provide affordability support of ₹10 per kg of CBG, equivalent to ₹215 per mmbtu for CBG with 95% methane content. This means the effective CBG cost will be recovered through a wide group of gas consumers and will be approximately ₹1,895 per mmbtu.

The ministry also clarified that CBG is not sold at its procurement price to city gas distribution (CGD) entities; it is pooled with other domestically produced natural gas. The cost is spread across the applicable domestic gas pool, which is now 2.5 to 3 times larger than before.