Govt strengthens domestic gas allocation policy to ensure reliable, affordable supply for CNG and PNG sectors, boosting clean energy access and urban air quality.
New Delhi
In order to guarantee affordable supply of domestic natural gas to the transport sector and households under the city gas distribution sector, the Union government has introduced some vital measures.
“We have introduced key policy measures aimed at strengthening the allocation framework for domestic natural gas, in alignment with its vision of promoting cleaner energy access, enhancing urban air quality, and bolstering domestic energy security,” ministry of petroleum and natural gas said in an official statement.
These steps have been taken to ensure affordable Domestic Natural Gas to CNG (Transport) and PNG (Domestic) Segments under CGD Sector, the statement said.
With a focus on ensuring the sustained availability and affordability of natural gas for key public-facing segments—CNG used in transport and PNG used in domestic households for cooking— the petroleum ministry has introduced the important enhancements to the Domestic Gas Allocation Policy.
From Q1 FY 2025-26, domestic natural gas allocations for CNG (T) and PNG (D) segments will be done on a two-quarter advance basis. Allocation will also now include New Well Gas (NWG) from nomination fields of ONGC and OIL.
Estimations by GAIL and ONGC will help ensure supply visibility to CGD entities in advance, enhancing planning and delivery efficiency. Auction-based allocation for NWG has been replaced with a quarterly pro-rata allocation to ensure timely and reliable supply.
GAIL will allocate NWG to CGD entities in proportion to their requirements, in accordance with prevailing MoPNG guidelines.
Despite increasing demand in the CGD sector, allocation ratios of domestic gas have broadly been maintained — Q3 2024–25: 54.68% of projected demand allocated, Q1 2025–26: 55.68% allocation and Q2 2025–26 (Projected): 54.74% allocation.
As both APM gas and New Well Gas prices are linked to Indian Crude Basket prices, calculated monthly, with the recent decline in crude prices, this allocation of domestic gas would make natural gas more affordable for CNG (T) and PNG (D) consumers.
These strategic measures by the Government will lead to enhanced ability of CGD entities to forecast demand and manage supply efficiently, improved supply predictability and better affordability for CGD companies due to crude-linked pricing. These measures will ensure a stable, affordable, and transparent domestic gas supply system for the critical transport and domestic segments under the CGD network, benefitting millions of urban and semi-urban consumers across India.
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