Govt Rejects CBG Price Hike Concerns, Says Impact on CNG, PNG Consumers Negligible

August 29, 2026

New Delhi: The government on Saturday rejected concerns that the revised price of Compressed Biogas (CBG) under the GOBARdhan Scheme could significantly increase the burden on CNG and household PNG consumers.

The Ministry of Petroleum and Natural Gas said the concerns were based on inconsistent assumptions and clarified that the revised CBG procurement price is not the price directly paid by CNG or PNG consumers.

CBG procurement price rises 43 per cent

Under the existing pricing mechanism, the price paid to CBG producers is linked to 85 per cent of the retail selling price of CNG. Based on the latest revision, this works out to around Rs 1,478 per MMBtu.

Under the revised GOBARdhan framework, the CBG procurement price has been fixed at Rs 2,110 per MMBtu, marking an increase of around 43 per cent over the prevailing price.

However, the ministry clarified that this is the procurement price paid to CBG producers and does not represent the price directly paid by CNG or household PNG consumers.

Government support to limit consumer impact

The government will provide affordability support of Rs 10 per kg of CBG, equivalent to around Rs 215 per MMBtu for CBG containing 95 per cent methane.

This support will be funded by the government and will reduce the amount that needs to be recovered through gas consumers.

After accounting for the government support, the effective CBG cost to be recovered through the gas consumer base would be around Rs 1,895 per MMBtu, compared with the prevailing effective price of Rs 1,478 per MMBtu.

This amounts to an effective increase of approximately 28 per cent, which is significantly lower than the headline increase in the procurement price.

CBG cost to be spread across larger gas base

The ministry also clarified that CBG is not sold to City Gas Distribution (CGD) entities at its procurement price. Instead, it is pooled with other domestically produced natural gas, with the cost distributed across the applicable domestic gas pool.

Under the earlier framework, the cost of CBG was spread only across the limited quantity of Administered Price Mechanism (APM) gas allocated to the CNG transport and domestic PNG segments.

Under the new framework, however, the net cost of CBG will be distributed across a domestic gas base that is approximately 2.5 to three times larger than the earlier base.

The government said this broader pooling mechanism will help keep the impact of the revised CBG pricing on CNG and PNG consumers negligible.