New Delhi: In a major policy update aligned with its clean energy vision, the Government of India has introduced key enhancements to the Domestic Gas Allocation Policy aimed at improving affordability, supply predictability, and access to cleaner fuels across the country. The measures are particularly focused on supporting the Compressed Natural Gas (CNG) used in transport and Piped Natural Gas (PNG) used in domestic cooking—two critical public-facing segments under the City Gas Distribution (CGD) network.
The Ministry of Petroleum and Natural Gas (MoPNG) announced that from Q1 of FY 2025-26, domestic natural gas allocation will be conducted on a two-quarter advance basis, helping CGD entities better plan for demand and supply. The move includes the incorporation of New Well Gas (NWG) from nomination fields of ONGC and OIL, expanding the sources of domestic gas available for allocation.
Key Highlights of the Revised Policy–
1. Advance Quarterly Allocation:
Allocations for CNG (transport) and PNG (domestic) segments will now be done in advance for two quarters, beginning Q1 FY 2025-26. Estimations by GAIL and ONGC will guide allocations, enabling smoother supply chain planning and service delivery.
2. Pro-Rata Allocation of New Well Gas:
In a shift from auction-based distribution, NWG will now be allocated on a quarterly pro-rata basis—a move aimed at ensuring timely, fair, and reliable supply. GAIL will oversee this allocation as per MoPNG guidelines, distributing gas proportionately based on CGD entities’ requirements.
3. Consistent Allocation Ratios Amid Rising Demand:
Despite growing demand in the CGD sector, the Government has broadly maintained allocation ratios:
- Q3 FY 2024–25: 54.68% of projected demand
- Q1 FY 2025–26: 55.68%
- Q2 FY 2025–26 (Projected): 54.74%
This highlights the Government’s commitment to prioritizing essential public utilities.
4. Crude-Linked Pricing for Affordability:
With prices of both APM gas and NWG now linked to the Indian Crude Basket, and current trends showing a decline in crude oil prices, CNG and PNG are expected to become more affordable for consumers. Prices are updated monthly to reflect market realities.
Strategic Impact
These forward-looking measures are expected to:
- Improve supply predictability for CGD companies
- Enhance operational planning and efficiency
- Ensure stable and affordable gas supply for millions of urban and semi-urban consumers
- Support cleaner air in cities through increased CNG usage in transport
- Reinforce domestic energy security
The policy overhaul reflects the Government’s broader agenda of promoting cleaner energy, improving urban air quality, and securing sustainable access to domestic fuel sources for Indian households and the transport sector.
