The Ministry of Petroleum & Natural Gas has clarified that a recent revision to the price of Compressed Biogas (CBG) under the GOBARdhan Scheme will not burden ordinary consumers of CNG or household cooking gas. The ministry said the pricing change supports producers while spreading costs across a much larger customer base, keeping individual bills stable.
How the new pricing works
The procurement price paid to CBG producers has been increased to approximately ₹2,110 per MMBtu (Million British Thermal Units), up from ₹1,478 per MMBtu under the previous system. This represents a 43% jump in what producers receive.
However, consumers will not bear the full weight of this increase. The Government will provide affordability support of ₹10 per kilogram of CBG, which equals about ₹215 per MMBtu for CBG with 95% methane content. This Government-funded subsidy is not recovered from consumer bills.
After subtracting the Government support, the effective cost to be recovered from consumers becomes approximately ₹1,895 per MMBtu. This is only a 28% increase compared to the previous price of ₹1,478 per MMBtu.
Additionally, CBG is not sold directly to consumers at procurement prices. Instead, it is mixed with other domestically produced natural gas. Under the new system, the blended cost of CBG is spread across a domestic gas pool that is 2.5 to 3 times larger than before. Previously, CBG costs affected only the limited quantity of gas allocated to CNG transport and household PNG segments. The wider distribution means any price increase gets diluted significantly across more consumers.
What this means for you
If you use CNG for your vehicle or PNG for cooking, your bills should see negligible impact from this revision. While the price paid to CBG producers has gone up substantially, Government subsidy and the spreading of costs across a much larger customer base together insulate individual consumers from material price increases.