New Delhi, Aug. 29: The government’s revised pricing framework for Compressed Biogas (CBG) under the GOBARdhan initiative is aimed at ensuring better financial viability for producers while keeping the impact on CNG and domestic PNG consumers minimal, according to an official clarification issued on Friday.The clarification came after concerns were raised that the revised CBG procurement price could result in a substantial increase in costs for consumers using Compressed Natural Gas (CNG) for transportation and Piped Natural Gas (PNG) in households.
Officials said such concerns did not fully account for the government’s affordability support and the wider mechanism through which CBG costs are distributed across the domestic gas system.
Under the earlier arrangement, the price paid to CBG producers was linked to 85 per cent of the retail selling price of CNG, resulting in a rate of around ₹1,478 per MMBTU. Under the revised framework, the CBG price has been fixed at ₹2,110 per MMBTU.
While the difference represents an increase of about 43 per cent in the producer purchase price, the government stressed that this amount should not be viewed as a direct increase in the price paid by CNG or PNG consumers.
The government will provide affordability support of ₹10 per kilogram for eligible CBG, which is estimated to be equivalent to around ₹215 per MMBTU for gas with approximately 95 per cent methane content.
This would bring the effective cost to about ₹1,895 per MMBTU.As a result, the effective increase over the earlier CBG price is estimated at around 28 per cent, with a portion of the cost being borne by the government rather than being passed entirely to gas consumers.
The clarification also highlighted changes in the mechanism used to distribute CBG costs. CBG is pooled with other domestically produced natural gas, and its cost is spread across the applicable domestic gas pool rather than being directly charged to individual consumers.
Previously, the cost was allocated over a comparatively limited volume of gas linked mainly to CNG used in transport and PNG supplied to households. Under the revised arrangement, the CBG cost will be distributed over a domestic gas base estimated to be around 2.5 to three times larger.
Officials said that spreading the cost over a wider gas pool would significantly reduce the impact on individual consumers.The revised framework is intended to provide CBG producers with a more stable and commercially viable price, helping plants maintain operations and encouraging further investment in the sector.
CBG is produced from organic and biodegradable waste and is being promoted as part of India’s broader efforts to improve waste management, develop cleaner fuels and strengthen alternative energy sources.
The government said the new pricing approach seeks to balance the need to support CBG producers with the objective of protecting consumers from any substantial increase in gas prices through financial assistance and broader cost pooling.
