Govt unveils Framework for Domestic Natural Gas to CNG (Transport), PNG (Domestic) Segments under CGD Sector

As part of its goal to improve urban air quality, increase domestic energy security, and promote cleaner energy access, the government has proposed important policy measures to strengthen the domestic natural gas allocation framework.

With a focus on ensuring the sustained availability and affordability of natural gas for key public-facing segments—Compressed Natural Gas (CNG) used in transport and Piped Natural Gas (PNG) used in domestic households for cooking—the Ministry of Petroleum and Natural Gas (MoPNG) has introduced the following important enhancements to the Domestic Gas Allocation Policy:

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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.

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GAIL will allocate NWG to CGD entities in proportion to their requirements, in accordance with prevailing MoPNG guidelines.

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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