Govt Rolls Out Advance and Pro-Rata Gas Allocation System to Boost CNG, PNG Supply

In a major policy shift to enhance gas availability and affordability, the Ministry of Petroleum and Natural Gas (MoPNG) has introduced a revised allocation framework for Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) segments under the City Gas Distribution (CGD) network. Effective Q1 of FY2025-26, domestic gas allocations for CNG (transport) and PNG (domestic cooking) will now be made two quarters in advance, offering CGD entities greater visibility and planning capabilities.

The reformed system also includes New Well Gas (NWG) from ONGC and OIL’s nomination fields, with supply estimates from GAIL and ONGC ensuring timely logistics. Notably, the earlier auction-based NWG allocation has been replaced by a pro-rata system aligned with CGD companies’ requirements.

While demand continues to grow, the government has sustained its allocation ratio, marginally increasing from 54.68% in Q3 FY2024-25 to 55.68% in Q1 FY2025-26. Pricing for both APM and NWG gas will remain tied to the Indian Crude Basket, which could bring cost relief amid falling crude prices.

This reform underlines the government’s commitment to cleaner energy access, reliable urban gas supply, and improved air quality, creating a more transparent and efficient energy ecosystem.