CBG Price Revision Aims to Boost Producers Without Burdening CNG, PNG Users

Revised CBG pricing offers better support to producers while government assistance and wider gas pooling aim to protect CNG and PNG consumers.

New Delhi, August 29, 2026; The Ministry of Petroleum and Natural Gas on Saturday said the revised pricing mechanism for Compressed Biogas (CBG) under the GOBARdhan Scheme has been structured to strengthen the financial viability of CBG producers while limiting any impact on consumers.

The ministry issued the clarification in response to reports suggesting that the new CBG pricing arrangement could substantially increase costs for users of Compressed Natural Gas (CNG) and household Piped Natural Gas (PNG).

Under the earlier arrangement, CBG producers were paid a price linked to 85 per cent of the retail selling price of CNG. This translated into a procurement price of approximately Rs 1,478 per million British thermal units (MMBtu).

The revised framework has set the procurement price at Rs 2,110 per MMBtu, representing an increase of nearly 43 per cent. However, the ministry said the figure should not be viewed as a direct increase in the price paid by CNG or PNG consumers.

To reduce the effective cost, the government will provide financial support of Rs 10 per kg of CBG. For CBG containing around 95 per cent methane, this assistance amounts to nearly Rs 215 per MMBtu.

After factoring in the support, the effective cost to be recovered through the gas system is estimated at around Rs 1,895 per MMBtu, according to the ministry.

The government has also changed the way CBG costs are distributed. Rather than passing the procurement cost directly to city gas distribution companies, CBG will be pooled with other domestically produced natural gas.

The ministry said the broader domestic gas pool under the revised arrangement will be around 2.5 to 3 times larger than the base used previously. Earlier, the cost was largely distributed across the limited allocation of gas under the Administered Price Mechanism (APM) for the CNG transport and domestic PNG sectors.

According to the ministry, the combination of government support and a wider gas pool will prevent any significant increase in the burden on individual consumers.

The revised policy is therefore intended to provide CBG producers with a more predictable and sustainable revenue framework while maintaining affordability for households and CNG users.