New Delhi, August 29: The Ministry of Petroleum and Natural Gas said the revised pricing framework for compressed biogas (CBG) under the GOBARdhan Scheme will have a negligible impact on individual CNG and household PNG consumers.
The ministry said the price paid to CBG producers has been fixed at ₹2,110 per MMBtu, compared with approximately ₹1,478 per MMBtu under the existing system. This amounts to an increase of around 43% in the producer procurement price.
However, the ministry clarified that the ₹2,110 per MMBtu is the procurement price paid to CBG producers and is not the price directly paid by CNG or household PNG consumers.
Under the revised framework, the government will provide ₹10 per kg of CBG as affordability support, equivalent to approximately ₹215 per MMBtu for CBG with 95% methane content. After accounting for this support, the effective CBG cost to be recovered through the wider gas consumer base would be around ₹1,895 per MMBtu, the ministry said.
Compared with the prevailing CBG price of ₹1,478 per MMBtu, this represents an effective increase of around 28%, compared with the 43% increase in the producer procurement price.
The ministry also said CBG is not sold to city gas distribution entities at its procurement price. Instead, it is pooled with other domestically produced natural gas, with its cost spread across the applicable domestic gas pool.
Under the earlier arrangement, the cost of CBG was spread across the limited quantity of APM gas allocated to the CNG (Transport) and PNG (Domestic) segments. Under the revised framework, the net CBG cost will be spread across a domestic gas base approximately 2.5 to 3 times larger than the earlier base.
The ministry said the wider gas pool will therefore keep the price impact on an individual gas consumer negligible.
The clarification follows a Business Standard report published on August 24 that cited industry concerns over the higher CBG procurement price and its potential implications for city gas distributors, motorists and households.
The GOBARdhan scheme also provides for a phased CBG blending obligation in the CNG (Transport) and PNG (Domestic) segments. The obligation is set at 3% in FY2026-27, 4% in FY2027-28 and 5% from FY2028-29 onwards.
The Ministry of Petroleum and Natural Gas said the framework has been designed to provide CBG producers with a stable and viable price while using government-funded affordability support and a wider domestic gas pool to avoid any material impact on consumers.
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