New Delhi, August 29: The Centre on Saturday said the revised pricing framework for Compressed Biogas (CBG) under the GOBARdhan Scheme has been designed to support producers while ensuring that consumers of CNG and household PNG do not face any material increase in prices.
The clarification came in response to a recent newspaper article which suggested that the revised CBG price could impose a significant additional burden on CNG and household PNG consumers.
According to the government, under the existing system, 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 translates into approximately ₹1,478 per MMBtu.
Under the GOBARdhan Scheme, the CBG procurement price has now been fixed at ₹2,110 per MMBtu, representing an increase of around 43 per cent.
However, the government said the procurement price is not the price directly paid by CNG or household PNG consumers.
It said the government will provide affordability support of ₹10 per kg of CBG, equivalent to approximately ₹215 per MMBtu for CBG containing 95 per cent methane. The support will be funded by the government and will not be recovered entirely from gas consumers.
After accounting for the government support, the effective CBG cost to be recovered through the broader gas consumer base would be around ₹1,895 per MMBtu, compared with the prevailing price of ₹1,478 per MMBtu. This translates into an effective increase of approximately 28 per cent.
The Centre further 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.
Earlier, the cost of CBG was spread only across the limited quantity of APM gas allocated to the CNG (Transport) and PNG (Domestic) segments.
Under the revised framework, the government said, the net cost of CBG will be distributed across a domestic gas base approximately 2.5 to 3 times larger than the earlier base.
The wider pooling mechanism is expected to substantially dilute the impact of the revised CBG procurement price on individual consumers.
The government said the revised pricing framework seeks to balance two objectives—providing CBG producers with a stable and viable price to enable sustainable operation of their plants, while protecting consumers through government-funded affordability support and a significantly wider gas pool.
As a result, the government maintained that the revised framework is not expected to have any material impact on the prices paid by individual CNG and household PNG consumers.
