The Petroleum and Natural Gas Ministry has clarified that the revised pricing for Compressed Biogas (CBG) under the GOBARdhan Scheme would support producers without placing a material burden on CNG and household piped natural gas (PNG) consumers, countering a newspaper report that suggested otherwise.
In a release issued through the Press Information Bureau (PIB), the Ministry said the report’s conclusion was based on select inconsistent assumptions and did not present the correct picture. Under the earlier system, the price paid to CBG producers was linked to 85 per cent of the retail selling price of CNG, which worked out to approximately Rs 1,478 per MMBtu, according to the release. Under the GOBARdhan Scheme, the CBG price has now been fixed at Rs 2,110 per MMBtu, an increase of about 43 per cent.
The Ministry clarified that this was the procurement price paid to CBG producers and not the price directly paid by CNG or household PNG consumers. It said the Government would provide affordability support of Rs 10 per kg of CBG, equivalent to approximately Rs 215 per MMBtu for CBG with 95 per cent methane content, which would be funded by the Government rather than recovered from consumers. As a result, the effective CBG cost to be recovered through gas consumers would work out to approximately Rs 1,895 per MMBtu, an effective increase of about 28 per cent over the prevailing price of Rs 1,478 per MMBtu, the release said.
The Ministry further explained that CBG was not sold to city gas distribution (CGD) entities at its procurement price, but was pooled with other domestically produced natural gas, with its cost spread across the applicable domestic gas pool. Earlier, the cost of CBG was spread only across the limited quantity of Administered Price Mechanism (APM) gas allocated to the CNG (Transport) and PNG (Domestic) segments. Under the new framework, the release said, the net cost of CBG would be spread across a domestic gas base approximately 2.5 to 3 times larger than the earlier base, making the price impact on individual consumers negligible.
According to the Ministry, the revised pricing framework has been designed to balance two objectives, ensuring CBG producers receive a stable and viable price to operate plants sustainably, while Government-funded affordability support and a substantially wider gas pool shield consumers from any material price impact.
