Centre takes key steps to ensure affordable CNG, PNG gas supply

New Delhi, April 18 (IANS) The government on Friday said it has introduced key policy measures aimed at strengthening the allocation framework for domestic natural gas, in alignment with its vision of promoting cleaner energy access, enhancing urban air quality, and bolstering domestic energy security.

With a focus on ensuring the sustained availability and affordability of natural gas for key public-facing segments — Compressed Natural Gas (CNG) used in transport and Piped Natural Gas (PNG) used in domestic households for cooking — the Ministry of Petroleum and Natural Gas (MoPNG) has introduced several important enhancements to the Domestic Gas Allocation Policy.

From Q1 FY 2025-26, domestic natural gas allocations for CNG (T) and PNG (D) segments will be done on a two-quarter advance basis. Allocation will also now include New Well Gas (NWG) from nomination fields of ONGC and OIL, informed the ministry.

Estimations by GAIL and ONGC will help ensure supply visibility to CGD entities in advance, enhancing planning and delivery efficiency.

“Auction-based allocation for NWG has been replaced with a quarterly pro-rata allocation to ensure timely and reliable supply. GAIL will allocate NWG to CGD entities in proportion to their requirements, in accordance with prevailing MoPNG guidelines,” the ministry further informed.

Despite increasing demand in the CGD sector, allocation ratios of domestic gas have broadly been maintained.

For Q3 2024–25, 54.68 per cent of projected demand was allocated and for Q1 2025–26, 55.68 per cent allocation and for Q2 2025–26 (Projected), 54.74 per cent allocation are projected.

Broad trajectory in domestic gas allocation reflects the government’s commitment to prioritise public-facing segments like transport and domestic cooking.

As both APM gas and New Well Gas prices are linked to Indian Crude Basket prices, calculated monthly, with the recent decline in crude prices, this allocation of domestic gas would make natural gas more affordable for CNG (T) and PNG (D) consumers.

These strategic measures will lead to enhanced ability of CGD entities to forecast demand and manage supply efficiently, improved supply predictability and better affordability for CGD companies due to crude-linked pricing, said the ministry.

--IANS

na/