No material price impact on CBG with revised offtake framework ensures sustainable operation of plants: Govt.

Reacting to fears that compressed biogas (CBG) will become increasingly expensive with the revised offtake price, the Union Petroleum Ministry assured that prices cushioned by government-funded support and a build-up with a substantially wider gas pool would avert any price impact of the material.

On August 6, the Union Cabinet approved the GOBARdhan scheme, which introduced a CBG offtake price of ₹2,110 per metric million British thermal unit (MMBTU).

Responding to a media report, he added that the revised price framework seeks to provide CBG producers with a “stable and viable” price that would enable them to operate “sustainably”.

The Ministry specified that the full price of the consumption will not be recovered through gas customers.

It explained that the government will provide a price floor of ₹10 per kilogram of CBG – which equates to around ₹215 per MMBtu of CBG with 95% methane content.

In fact, with financial support, the cost of CBG would be ₹1,895 per MMBtu.

This would be around 28% higher than the prevailing price of ₹ 1,478 per MMBtu.

The petroleum ministry also claimed that CBG is not being sold at cost price to city gas distributors. It is pooled with other domestically produced natural gas and costs are spread on a proportional basis in the domestic gas pool.

Previously, the cost of CBG was spread between a limited amount of regulated pricing mechanism gas allocated to the CNG (transport) and PNG (domestic) segments.

“Under the new framework, the net cost of CBG will be spread over a domestic gas base approximately 2.5 to 3 times larger than the previous base,” it said, adding, “Due to the spread of CBG costs over a much larger gas pool, the price impact on the individual gas consumer will be negligible.

Published – 29 Aug 2026 21:48 IST