PNGRB Directs CGD Companies to Implement Unified Pricing
India’s petroleum regulator has mandated that city gas distributors implement a uniform pricing structure for piped natural gas (PNG) supplied to households. This decision aims to address concerns over a tiered pricing system that has been perceived as unfair to genuine consumers and potentially encourages misuse of subsidized gas. The Petroleum and Natural Gas Regulatory Board (PNGRB) has emphasized that all domestic users should be charged the same rate, regardless of their consumption levels.
Uniform Pricing Directive
The PNGRB’s recent directive highlights the need for a standardized pricing approach for PNG supplied to households. The regulator noted that some city gas distribution (CGD) companies have been employing a telescopic pricing model, where the cost per Standard Cubic Metre (SCM) of natural gas increases once consumption exceeds a certain threshold. This practice has raised concerns that it could inadvertently allow commercial consumers, misclassified as domestic users, to exploit subsidized gas rates. The PNGRB has labeled this pricing structure as “incorrect” and has urged CGD firms to reassess their billing practices to ensure fairness for all residential users.
The regulator’s notice underscores the importance of protecting genuine domestic consumers from being subjected to higher charges based on their consumption. By enforcing a uniform rate, the PNGRB aims to eliminate discrepancies in billing and promote transparency in the gas distribution sector. The regulator has instructed companies to investigate consumer usage patterns and identify any outliers to ensure equitable pricing for all households.
Concerns Over Misuse of Subsidized Gas
The issue of subsidized gas misuse is not new and mirrors similar challenges faced in the liquefied petroleum gas (LPG) sector. In that sector, subsidized cylinders intended for household use are often misappropriated by commercial establishments, which seek to avoid paying higher prices for commercial cylinders. The PNGRB’s directive aims to curb such practices in the PNG sector by ensuring that subsidized natural gas is reserved strictly for domestic consumers.
Natural gas allocated under the Administered Price Mechanism (APM) is priced lower than market rates and is intended for household and transport use only. Commercial entities, such as restaurants and hotels, are required to purchase gas at market rates. The PNGRB’s efforts to standardize pricing are part of a broader initiative to enhance the integrity of the gas distribution system and ensure that subsidies benefit the intended recipients.
Regulatory Changes and Future Plans
In addition to the uniform pricing directive, the PNGRB has recently introduced the Second Amendment to the Natural Gas Pipeline Tariff Regulations, 2025. This amendment reduces the number of tariff zones from three to two and extends unified tariffs to both domestic PNG and compressed natural gas (CNG) segments across the country. These changes are part of the regulator’s ongoing efforts to streamline the gas sector and promote the use of cleaner fuels.
India’s long-term energy strategy aims to increase the share of natural gas in its primary energy mix from the current 7% to 15% by 2030. A recent study by the PNGRB indicates that city gas distribution will play a crucial role in meeting this demand, with PNG and CNG expected to account for over 87 million standard cubic meters per day by 2030. The regulator’s initiatives are designed to facilitate this transition and ensure that the benefits of natural gas reach all consumers effectively.
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