The revised Compressed Biogas (CBG) price under the GOBARdhan Scheme aims to ensure stability for producers while limiting any price impact on consumers, due to affordability support and a larger gas pool.
Under the current system, CBG producers receive a price linked to 85% of the retail selling price of Compressed Natural Gas (CNG). This translates to approximately ₹1,478 per Million British Thermal Units (MMBtu) as of the latest revision.
However, under the GOBARdhan Scheme, the procurement price for CBG has been set at ₹2,110 per MMBtu. This represents a 43% increase from the previous price.
This full price will not be recovered directly from consumers. The Government plans to provide affordability support equivalent to approximately ₹215 per MMBtu for CBG with 95% methane content. This support will be funded by the Government and will not be entirely recovered from gas consumers.
As a result, the effective CBG cost to be recovered from a wide group of gas consumers will be ₹1,895 per MMBtu. Compared to the prevailing CBG price, the effective increase is significantly less.
Furthermore, it's important to note that CBG is not sold at its procurement price to City Gas Distribution (CGD) entities. Instead, it is pooled with other domestically produced natural gas, and its cost is spread across the applicable domestic gas pool. This distribution allows for a negligible price impact on individual consumers due to the substantially larger gas pool.
The revised pricing framework has been designed to balance two objectives: ensuring sustainable operations for CBG producers while protecting consumers from any material price impact.
Source:
Press Information Bureau
