Government Implements Key Strategies for Affordable CNG and PNG Gas Supply
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Synopsis
The government has introduced pivotal policy changes to enhance the domestic natural gas allocation framework, aiming to promote cleaner energy access and improve air quality. Significant reforms focus on ensuring affordable and reliable supplies for CNG and PNG sectors.
Key Takeaways
- Policy measures for domestic natural gas allocation have been introduced.
- Focus on the affordability of CNG and PNG for public sectors.
- Allocations now include New Well Gas from ONGC and OIL.
- Estimation by GAIL aids in enhanced supply planning.
- Recent crude price drops lead to lower gas prices.
New Delhi, April 18 (NationPress) The government announced on Friday the introduction of significant policy initiatives designed to enhance the allocation framework for domestic natural gas, aligning with its vision of fostering cleaner energy access, improving urban air quality, and strengthening domestic energy security.
With the aim of ensuring the ongoing availability and affordability of natural gas for essential public-facing sectors—Compressed Natural Gas (CNG) utilized in transportation and Piped Natural Gas (PNG) employed in households for cooking—the Ministry of Petroleum and Natural Gas (MoPNG) has rolled out several crucial reforms to the Domestic Gas Allocation Policy.
Starting from Q1 FY 2025-26, allocations of domestic natural gas for the CNG (T) and PNG (D) sectors will occur on a two-quarter advance basis. The allocation will also incorporate New Well Gas (NWG) from ONGC and OIL’s nomination fields, as stated by the ministry.
Estimations by GAIL and ONGC will facilitate better supply visibility for CGD entities in advance, thus enhancing planning and delivery efficiency.
“The auction-based allocation for NWG has been replaced with a quarterly pro-rata allocation to guarantee timely and dependable supply. GAIL will distribute NWG to CGD entities based on their requirements, following the existing MoPNG guidelines,” the ministry elaborated.
Even as demand in the CGD sector rises, the allocation ratios for domestic gas have largely been preserved.
For Q3 2024-25, 54.68 percent of projected demand was allocated; for Q1 2025-26, the allocation stands at 55.68 percent, and for Q2 2025-26 (projected), 54.74 percent is anticipated.
The overall trend in domestic gas allocation underscores the government’s commitment to prioritizing public-facing sectors like transportation and household cooking.
Since both APM gas and New Well Gas prices are linked to the Indian Crude Basket prices, which are calculated monthly, the recent downturn in crude prices is expected to make natural gas more affordable for CNG (T) and PNG (D) users.
These strategic initiatives will enhance CGD entities' ability to forecast demand and manage supply effectively, improve supply predictability, and create better affordability for CGD companies due to crude-linked pricing, according to the ministry.
