<a href="https://www.mid-day.com/business/business-news/article/cng-price-hiked-by-rs-3-89-per-kg-in-delhi-taking-the-rate-to-rs-86-98-from-today-23647270" target="_blank" rel="none noopener">Amid a rate hike in compressed natural gas (CNG</a>) in Delhi and Delhi NCR, the government on Saturday dismissed media reports that claimed the revised price of Compressed Biogas (CBG) under the GOBARdhan Scheme could significantly increase costs for CNG and household piped natural gas (PNG) consumers.
The Centre said these concerns were based on inconsistent assumptions, according to news agency IANS.&nbsp;
The Ministry of Petroleum and Natural Gas said the current pricing mechanism links the price paid to CBG producers to 85 per cent of the retail selling price of CNG.&nbsp;
According to the latest revision, the CBG procurement price is around Rs 1,478 per MMBtu. Under the revised GOBARdhan framework, the government has fixed CBG procurement price at Rs 2,110 per MMBtu. This is about 43 per cent higher &nbsp;than the prevailing price.&nbsp;
However, the procurement price is paid to CBG producers and it is not the price directly paid by CNG or household PNG consumers, the ministry clarified.
<h2>Government support to reduce burden on consumers</h2>
The Centre has said it will provide affordability support of Rs 10 per kg of CBG, equivalent to approximately Rs 215 per MMBtu for CBG containing 95 per cent methane. This is expected to reduce the amount that needs to be recovered through gas consumers.
After factoring in the government support, the effective CBG cost to be recovered through the gas consumer base would be around Rs 1,895 per MMBtu, compared with the prevailing effective price of Rs 1,478 per MMBtu. So, the effective price increase would be around 28 per cent, significantly lower than the headline increase in the procurement price.
Under the earlier framework, the cost of CBG was spread only across the limited quantity of Administered Price Mechanism (APM) gas allocated to the CNG transport and domestic PNG segments. Under the new framework, however, the net cost of CBG will be distributed across a domestic gas base that is approximately 2.5 to three times larger than the earlier base, according to IANS.
<a href="https://www.mid-day.com/news/india-news/article/petroleum-ministry-assures-no-fuel-shortage-lpg-carrier-shivalik-to-dock-at-mundra-shortly-23621069" target="_blank" rel="none noopener">Ministry of Petroleum and Natural Gas</a> 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.
"The revised pricing framework has been carefully designed to balance two objectives. CBG producers receive a stable and viable price that enables plants to operate sustainably, while Government-funded affordability support and a substantially wider gas pool protect consumers from any material price impact," the ministry said.
<h2>CNG Price hike</h2>
The CNG prices were increased by Rs 3.89 per kg in Delhi and several adjoining cities, with the revised rates coming into effect from 6 am on Saturday. The increase takes the <a href="https://www.mid-day.com/news/india-news/article/cng-prices-in-delhi-hiked-by-rs-1-reaches-rs-81-per-kg-23631848" target="_blank" rel="none noopener">price of CNG in Delhi</a> from Rs 83.09 per kg to Rs 86.98 per kg. Revised rates have also been introduced in Noida, Greater Noida, Ghaziabad and Gurugram.
City gas distributor Indraprastha Gas said the rate hike was done to offset the rising input gas costs.
(With inputs from IANS)

The current pricing mechanism links the price paid to CBG producers to 85 per cent of the retail selling price of CNG, the ministry said

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The Ministry of Petroleum and Natural Gas said the current pricing mechanism links the price paid to CBG producers to 85 per cent of the retail selling price of CNG

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Home / Business / Business News / Article / Centre: Compressed biogas price hike impact on CNG, PNG consumers will be negligible