New Delhi: India’s natural gas market has begun showing tangible consumer benefits from the Petroleum and Natural Gas Regulatory Board’s (PNGRB) recent overhaul of pipeline tariffs, with city gas operators starting to cut compressed natural gas (CNG) and piped natural gas (PNG) prices.
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While Think Gas has already announced reductions in CNG and domestic PNG prices across multiple states ahead of the new tariff regime coming into effect on January 1, 2026, other city gas distribution (CGD) companies are expected to announce similar cuts in the coming days.
The Petroleum and Natural Gas Regulatory Board on December 16 announced a rationalised tariff structure for natural gas pipelines, which transport gas used for power generation, fertiliser production, CNG and household cooking.
Under the revised regime, effective January 1, 2026, the number of distance-based tariff zones has been reduced from three to two — up to 300 km and beyond — with a single lower Zone-1 tariff of around Rs 54 per million British thermal unit now applicable nationwide for CNG and domestic PNG consumers, irrespective of distance from the gas source.
This replaces the earlier three-tier system that imposed progressively higher charges for longer distances and is expected to reduce delivered gas costs by thousands of crores annually, directly translating into lower prices for end users.
The reform underpins the ‘One Nation, One Grid, One Tariff’ vision, aims to reduce regional disparities in gas transportation costs, and aligns natural gas more competitively with alternative fuels, supporting wider adoption of cleaner energy.
Think Gas announced an up to Rs 2.50 per kg cut in CNG prices for customers in Uttar Pradesh, Bihar and Punjab, along with a reduction of around Rs 3 per standard cubic metre in domestic PNG prices, reflecting lower transportation costs under the revised tariff framework.
The company has also planned cuts of up to Rs 5 per scm in other regions and voluntary price reductions in states not yet connected to the national gas grid as part of its consumer-centric pricing strategy.
Industry stakeholders welcomed the development as a direct outcome of PNGRB’s regulatory intervention to simplify transmission charges and reduce zonal disparities.
The Association of City Gas Distribution Entities praised PNGRB’s Unified Tariff order of December 16. Its Director General Subhash Kumar said the reform is a landmark step that will improve accessibility and affordability of natural gas, support cleaner fuel adoption, strengthen investor confidence and safeguard consumer interests.
In a statement, he said the move “could end up being a path-breaking significant milestone towards enhancing the affordability and accessibility of natural gas for households and transport consumers, promoting the adoption of cleaner fuels, helping India to meet its commitments on environment front at global for a by increasing the share of natural gas (a fuel known to have 13 to 32 percent lower carbon footprint compared to diesel, petrol and LPG) in the national energy mix.”
He added that the simplification of the unified tariff structure, rationalisation of tariff zones and introduction of operational measures for improved monitoring and transparency reflect PNGRB’s balanced regulatory approach, “safeguarding consumer interests while ensuring the financial sustainability of pipeline infrastructure and reinforcing investor confidence.”
ACE also highlighted PNGRB’s consultative approach, including its move to invite stakeholder inputs on a comprehensive review of the Access Code for Natural Gas Pipelines aimed at harmonising access, capacity booking and interoperability provisions.
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“The approach of PNGRB to make such major enabling policy decisions, after due consultations, with a view to promote gas consumers’ views and enabling ease of business will definitely help realise the vision of Prime Minister of India for gas to have 15 per cent share in national energy mix,” Kumar said.
Natural gas currently accounts for just over 6 per cent of India’s overall energy basket.
