PNGRB Restructures Gas Transportation Tariffs to Lower CNG and PNG Costs
PNGRB has restructured India's natural gas transportation tariff system, reducing zones from three to two based on distances up to 300km and over 300km. The change is expected to lower GCD transportation costs by ₹1,000 crores, resulting in CNG price reductions of ₹1.25-2.50 per kg and domestic PNG price cuts of ₹0.90-2.50 per SCM, aimed at boosting cleaner fuel adoption.
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The Petroleum and Natural Gas Regulatory Board (PNGRB) has implemented a major overhaul of India's natural gas transportation tariff structure, aimed at making CNG and PNG more affordable for consumers. This regulatory adjustment represents a significant shift in the country's gas sector pricing mechanism, designed to encourage greater adoption of cleaner fuel alternatives.
Tariff Zone Restructuring
The PNGRB has streamlined the existing tariff framework by reducing the number of zones from three to two distinct categories. The new simplified structure covers two distance-based zones:
| Zone Category: | Distance Coverage |
|---|---|
| Zone 1: | Up to 300 kilometers |
| Zone 2: | Over 300 kilometers |
This consolidation eliminates the complexity of the previous three-zone system, creating a more straightforward pricing mechanism for natural gas transportation across the country.
Financial Impact and Cost Savings
The restructured tariff system is projected to generate substantial cost reductions across the gas distribution network. The new framework is expected to lower Gas Connection Distribution (GCD) transportation costs by ₹1,000 crores, representing a significant reduction in operational expenses for gas distribution companies.
| Cost Impact: | Projected Savings |
|---|---|
| GCD Transportation Costs: | ₹1,000 crores reduction |
| CNG Price Reduction: | ₹1.25-2.50 per kg |
| Domestic PNG Price Reduction: | ₹0.90-2.50 per SCM |
Consumer Benefits
The tariff restructuring will directly benefit end consumers through reduced prices for both CNG and domestic PNG. CNG users can expect price reductions ranging from ₹1.25 to ₹2.50 per kilogram, while domestic PNG consumers will see cost savings between ₹0.90 and ₹2.50 per Standard Cubic Meter (SCM). These price reductions are expected to make natural gas-based fuels more competitive compared to conventional alternatives, potentially accelerating their adoption across various consumer segments.
Strategic Objectives
The PNGRB's decision to adjust the transportation tariff structure aligns with broader policy objectives to promote cleaner fuel adoption in India. By reducing the cost burden associated with natural gas transportation, the regulatory board aims to make CNG and PNG more accessible and affordable for both individual consumers and commercial users. This initiative supports the government's push toward cleaner energy alternatives and could contribute to reducing the country's dependence on more polluting fuel sources.
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