New Delhi, India: The revised pricing framework for compressed biogas (CBG) under the GOBARdhan Scheme is expected to provide greater price stability for producers while limiting the impact on CNG and household PNG consumers, according to the Ministry of Petroleum and Natural Gas.
Under the existing system, CBG producers receive a price linked to 85% of the retail selling price of CNG. Based on the latest revision, this amounts to approximately ₹1,478 per MMBtu. The new price under the GOBARdhan Scheme has been fixed at ₹2,110 per MMBtu, representing an increase of about 43%.
The ministry clarified that ₹2,110 per MMBtu is the procurement price paid to CBG producers and is not the price directly charged to CNG or household PNG consumers.
The government will provide affordability support of ₹10 per kg of CBG, equivalent to approximately ₹215 per MMBtu for CBG containing 95% methane. After accounting for this support, the effective CBG cost to be recovered through the gas consumer base would be around ₹1,895 per MMBtu. Compared with the earlier price of ₹1,478 per MMBtu, this represents an effective increase of approximately 28%.
The ministry said the cost impact is further moderated because CBG is not sold to city gas distribution 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.
Previously, the cost of CBG was distributed across a relatively limited quantity of APM gas allocated to the CNG transport and domestic PNG segments. Under the revised framework, the cost will be spread across a domestic gas base estimated to be 2.5 to 3 times larger than the earlier base.
According to the ministry, distributing the cost across the larger pool will keep the impact on individual gas consumers negligible. The revised framework is intended to balance producer viability with consumer affordability through government support and a wider gas pool.
Source: This article is based on an official press release issued by The Press information Bureau
Press Release: Press Information Bureau
