New subsidy scheme cushions consumers from CBG cost surge

Delhi, August 29 – The petroleum ministry clarified that the latest amendment to the Gobar‑Dhan scheme, which raises the CBG procurement price to ₹2,110 per MMCfTU, will not translate into a steep hike for CNG or PNG households. The ministry described the alarmist narratives as built on inconsistent assumptions.

Under the old regime, producers earned 85% of the CNG retail price, roughly ₹1,478 per MMCfTU. The new rate reflects a 43% uplift, but the government will counterbalance this through a direct subsidy of ₹10 per kilogram of CBG – about ₹215 per MMCfTU for gas with 95% methane content.

After the subsidy, the effective charge recoverable from consumers will be about ₹1,895 per MMCfTU, which is only 28% higher than the previous ₹1,478 level. This demonstrates that the consumer‑facing increase is far less than the headline figure.

The ministry also explained that CBG will not be sold to city‑gas distribution companies at its purchase price. Instead, it will be mixed with other domestic natural gas in a shared pool, dispersing the cost across a larger consumer base and further softening any impact on individual households.