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Informist, Wednesday, Dec. 17, 2025

 

MUMBAI – The Petroleum and Natural Gas Regulatory Board has notified unified tariff regulations starting Jan. 1 wherein multiple tariff zones will be replaced with only two now – one being the initial 300 kilometres from the source and another covering the area beyond 300 kilometres.

 

Under the revised norms, rates for Zone 1 have been revised to INR 54.0 per million British thermal units, while for Zone 2, the rates will be INR 102.9. In the previous regime which was notified in 2023, pipeline charges were as follows: INR 42 for up to 200 kilometres, INR 80.1 for a distance exceeding 300 kilometres but below 1,200 kilometres, and INR 106.8 for distances exceeding 1,200 kilometres.

 

The regulator rationalised the unified tariff structure for natural gas transportation to encourage wider adoption of compressed natural gas and piped natural gas, it said in a notification Tuesday. "This reform advances the objective of 'One Nation, One Grid, One Tariff', reduces regional disparities in transportation costs, and aligns natural gas pricing with the transportation cost policy of competitive fuels such as LPG and motor spirit," the notification said. 

 

The new tariff structure is expected to cut transportation costs for the city gas distribution sector by about INR 10 billion every year. As a result, compressed natural gas prices may fall by INR 1.25–INR 2.50 per kg, while domestic piped natural gas prices may drop by INR 0.90–INR 1.80 per standard cubic metre, the notification said.

 

Post the rationalisation, customers who use piped natural gas for household cooking and compressed natural gas for transportation purposes will see their fuel bills fall by INR 2-3 per unit, news reports quoted a PNGRB official as saying. This is largely because these two sets of customers will be charged a tariff of INR 54, which is Zone 1, irrespective of where they live in India.

 

These revised rates imply a hike of INR 0.4 per standard cubic metre for companies such as Mahanagar Gas Ltd. and a decline of around INR 0.9-INR 1.8 per standard cubic metre for companies such as Indraprastha Gas Ltd., Emkay Global Financial Services said in a report Wednesday.

 

While prices of most benchmarks including domestic gas and liquefied natural gas have reduced in the last three months, prices of US Henry Hub, through which GAIL (India) Ltd. sources LNG, saw a sharp uptick in prices due to cold weather and rising exports of LNG by the US. "The CGD (city gas distributors) sector should see some relief and, though UFT (unified tariff) rationalisation needs to be, most likely, passed on in the near term, it does provide some room to protect margins in the medium term for beneficiaries like IGL (Indraprastha Gas)," Emkay said.  End

 

Reported by Taniva Singha Roy

With inputs from Anand JC

Edited by Vandana Hingorani

 

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