PNGRB simplifies gas tariff zones to promote affordable and clean energy access across India

With a major step towards strengthening the sources towards a cleaner and sustainable energy landscape, the Petroleum and Natural Gas Regulatory Board (PNGRB) has approved the Second Amendment to the Natural Gas Pipeline Tariff Regulations, 2025.

The approval has been made during the recent Board meeting with a commitment to develop more transparent and consumer friendly investment in natural gas structure in India. The extensive consultation has been taken from stakeholders.

The PNGRB is aligned with the vision of One Nation One Grid, One Tariff and reflects the Board's strategy to ease the market structure and promote clean fuels with an inclusive gas based economy.

Key Reforms:

The Board has reduced the number of Unified Tariff Zones from three to two, simplifying the natural gas transportation system across the country.

This initiative comes handy with more equitable tariff structure and enhances access to natural gas.

With the aim of consumer satisfaction, the benefit of the Unified Zonal Tariff of Zone 1 has been extended nationwide to Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) Domestic segments to make natural gas affordable for households and the transport network.

The Regulatory Board has mandated pipeline operators to store at least 75% of their annual system-use gas through long-term contracts (minimum three-year tenure).

This will lower procurement risks, reduce

transaction costs, and ultimately result in more predictable and affordable tariffs.

Further, to fund future expansion, PNGRB has also unveiled a Pipeline Development Reserve which will utilise the earnings from pipeline entities that exceed 75% utilization benchmarks.

50% of these net-of-tax earnings will be reinvested into infrastructure development, while the remaining 50% will be passed on to consumers through Tariff adjustments.