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The Ministry of Petroleum & Natural Gas rejected a newspaper claim that the revised Compressed Biogas (CBG) price under the GOBARdhan Scheme would place a significant additional burden on CNG and household PNG consumers, calling the calculation a product of select inconsistent assumptions.
Under the existing system the price paid to CBG producers was linked to 85 per cent of the retail selling price of CNG, working out to about Rs 1,478 per MMBtu; under GOBARdhan it has been fixed at Rs 2,110 per MMBtu, an increase of roughly 43 per cent.
Government affordability support of Rs 10 per kg of CBG - about Rs 215 per MMBtu for CBG with 95 per cent methane content - brings the effective cost to be recovered from gas consumers down to about Rs 1,895 per MMBtu, an effective increase of about 28 per cent.
CBG is not sold to City Gas Distribution entities at its procurement price: it is pooled with domestically produced natural gas, and the new framework spreads its cost over a domestic gas base about 2.5 to 3 times larger than the earlier base of APM gas allocated to CNG (Transport) and PNG (Domestic).
The Ministry's conclusion is that producers get a stable and viable price that keeps plants running, while the wider pooling and government-funded support keep the impact on any individual gas consumer negligible.
| Aspect | Earlier arrangement | Under GOBARdhan |
|---|---|---|
| Basis of CBG price | Linked to 85% of the CNG retail selling price | Administered price fixed at Rs 2,110 per MMBtu |
| Indicative price level | About Rs 1,478 per MMBtu | Rs 2,110 per MMBtu, less Rs 215 support = about Rs 1,895 |
| Government support to consumers | None specified | Rs 10 per kg of CBG, funded by the Government |
| Where the cost is spread | Limited APM gas allocated to CNG (Transport) and PNG (Domestic) | The wider domestic gas pool, about 2.5-3 times larger |
| Effect on producers | Price moved with CNG retail prices | Stable, viable price enabling plants to operate sustainably |
Approved by the Union Cabinet on 6 August 2026 with an outlay of Rs 23,731 crore, to be implemented from FY 2026-27 to FY 2035-36 under the Ministry of Petroleum and Natural Gas. It unifies India's previously fragmented CBG support framework and aims to raise domestic CBG production nearly ten-fold.
Key: Structured around six growth engines covering assured offtake, pricing, capital support, pipelines, credit guarantees and ecosystem development, with a stable administered CBG price of Rs 2,110 per MMBtu backed by a minimum ten-year pricing framework.
Announced in the Union Budget of February 2018 and launched on 30 April 2018 by the Department of Drinking Water and Sanitation, to convert cattle dung, kitchen waste, crop residue and market waste into biogas, bio-CNG and bio-slurry.
Key: It is an integral component of Solid Waste Management under Phase II of the Swachh Bharat Mission (Grameen). The name therefore predates the 2026 national CBG scheme by eight years and sits under a different department - exams can test either avatar.
Launched by the Ministry of Petroleum and Natural Gas on 1 October 2018 to create a market for CBG in the transport and domestic sectors, with oil and gas marketing companies acting as assured off-takers.
Key: Envisaged 5,000 CBG plants producing 15 million metric tonnes of CBG per annum by 2023-24, at an investment of about Rs 1.7 lakh crore, with an expected 50 million tonnes of bio-manure. Progress lagged badly: as of 31 October 2022, 3,694 Letters of Intent had been issued but only 38 CBG/biogas plants had been commissioned. That gap between letters of intent and working plants is exactly what the pricing reform is meant to close.
Approved by the National Biofuels Coordination Committee on 24 November 2023, it mandates phased blending of CBG into CNG (Transport) and PNG (Domestic) supplied by the City Gas Distribution sector.
Key: Voluntary till FY 2024-25; mandatory from FY 2025-26 at 1 per cent, rising to 3 per cent in FY 2026-27 and 4 per cent in FY 2027-28, and 5 per cent from FY 2028-29 onwards. It was expected to draw about Rs 37,500 crore of investment and support 750 CBG projects by 2028-29. The blending mandate is the demand side; the administered price is the supply side.
Continued by the Ministry of New and Renewable Energy for 2021-22 to 2025-26 to promote bioenergy and waste-to-energy technologies, enhance energy security and support sustainable development. Phase-I was approved with a budget outlay of Rs 858 crore.
Key: Three sub-schemes: the Waste to Energy Programme (large biogas, bioCNG and power plants from urban, industrial and agricultural waste), the Biomass Programme (briquettes, pellets and non-bagasse cogeneration) and the Biogas Programme (family and medium-size rural biogas plants). Note the ministry split: bioenergy support runs through MNRE as well as the Ministry of Petroleum and Natural Gas.
Support the by-product side of CBG plants so digestate has a market and plant economics improve.
Key: Provides Rs 1,500 per metric tonne for Fermented Organic Manure (FOM), Liquid Fermented Organic Manure and Phosphate-Rich Organic Manure produced by GOBARdhan and CBG plants. FOM is the solid residue left after anaerobic digestion - the biogas is the fuel, the FOM is the fertiliser, and together they make CBG a circular-economy technology rather than merely a fuel project.
Biogas produced by anaerobic digestion of organic waste - cattle dung, crop residue, municipal solid waste - is a mixture dominated by methane and carbon dioxide. Upgrading removes the carbon dioxide and other impurities to raise methane content sharply, after which the gas is compressed; at that point it is functionally comparable to CNG and can be used in the same vehicles and the same distribution networks. The release's reference to 95 per cent methane content is the basis on which Rs 10 per kg converts to about Rs 215 per MMBtu. MMBtu stands for Metric Million British Thermal Unit, the standard energy-content unit for natural gas trade: one Btu is the heat needed to raise the temperature of one pound of water by 1 degree Fahrenheit at a constant pressure of one atmosphere, and one MMBtu is a million of those. Gas is priced per MMBtu rather than per cubic metre because what a buyer is really purchasing is energy, not volume. 'Pooling', the mechanism at the heart of the Ministry's argument, means a costlier gas stream is blended into a much larger pool of cheaper domestic gas, so the weighted-average price rises only slightly - the same logic used in pooled pricing elsewhere in Indian energy and fertiliser policy.
Simple Analogy: Pouring one expensive cup of coffee into a large jug of ordinary coffee raises the cost per cup by very little; pouring it into a small jug raises it a lot. The new framework simply uses a bigger jug.
Statutory regulator that protects the interests of consumers and entities and promotes competitive markets in refining, transportation, distribution, storage, marketing, supply and sale of petroleum products and natural gas. It created the regulatory framework for gas pipelines and City Gas Distribution (CGD) networks - the networks through which blended CBG actually reaches CNG stations and household PNG connections.
The inter-ministerial committee that takes policy decisions on biofuels. It approved the phased CBG Blending Obligation for the CNG (Transport) and PNG (Domestic) segments on 24 November 2023.
Runs the National Bioenergy Programme, including its Waste to Energy, Biomass and Biogas sub-schemes. Bioenergy in India is therefore a shared subject - MNRE on the renewable-energy side, the Ministry of Petroleum and Natural Gas on the transport-fuel and CGD side, and the Department of Drinking Water and Sanitation for the original rural GOBARdhan.
Constitutes the PNGRB and gives it authority over city gas distribution networks and natural gas pipelines - the delivery system into which CBG is blended under the CBO.
APM gas is gas from the nomination fields of ONGC and Oil India, priced administratively at 10 per cent of the monthly average of the Indian Crude Basket, subject to a floor of USD 4 per MMBtu and a ceiling of USD 6.5 per MMBtu. The Government gives priority in domestic gas allocation to the PNG (Domestic) and CNG (Transport) segments. The release's point is that CBG's cost used to be loaded on that narrow priority allocation and will now be spread across a much wider domestic gas base.
CBG blending in CNG/PNG is the gas-sector analogue of ethanol blending in petrol - a mandated percentage, assured off-take by oil marketing companies and an administered price. Comparing the two blending mandates and their target years is a natural exam question.
The original GOBARdhan sits inside Solid Waste Management under Swachh Bharat Mission (Grameen) Phase II. CBG converts a sanitation problem into a fuel plus a fertiliser (FOM), which is why the same scheme name spans a sanitation department and an energy ministry.
Crop residue is a feedstock for CBG plants, making the scheme one of the market-based answers to paddy stubble burning in the north-western states.
Gas pooling here works like pooled pricing elsewhere in Indian policy - a costly new supply is absorbed into a large existing base so the average consumer barely notices the difference.
GS Paper 3 > Infrastructure: Energy; Environment > Renewable Energy and Waste Management
General Awareness > Government Schemes and the Economy
General Awareness > Government Schemes
Biofuels, blending mandates and waste-to-energy have been recurring GS-3 and Prelims themes; the CBG blending obligation has featured since its approval in November 2023.
Biogas from anaerobic digestion of organic waste, upgraded to high methane content and compressed for use as a substitute for CNG.
Metric Million British Thermal Unit - the standard energy-content unit used to price natural gas.
Mandatory phased blending of CBG in CNG (Transport) and PNG (Domestic) in the CGD sector, approved by the NBCC on 24 November 2023.
The solid digestate by-product of a CBG plant, eligible for Market Development Assistance of Rs 1,500 per metric tonne.
Gas from the nomination fields of ONGC and Oil India priced under the Administered Price Mechanism at 10% of the Indian Crude Basket, within a USD 4-6.5 per MMBtu band.