India: CBG procurement price of 1478 Rs/MMBtu from 1 June 2025, linked to 85 per cent of the CNG price
India's Ministry of Petroleum and Natural Gas raised the procurement price of compressed biogas (CBG) from 1380 to 1478 Rs per MMBtu from 1 June 2025, linking it to 85 per cent of the average CNG price.
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India has raised the procurement price of compressed biogas (CBG) to 1478 Rs per MMBtu excluding GST. According to reports of 20 May 2025, the new price applies from 1 June to 31 October 2025 and results from a formula based on the CNG price: the basis is now 85 per cent, rather than 80 per cent, of the average retail CNG price in GAIL-linked networks.
New figures
| Parameter | Value from 1 June 2025 |
|---|---|
| CBG procurement price (excluding GST) | 1478 Rs/MMBtu (previously 1380) |
| Conversion to mass | about 77.4 Rs/kg (previously about 72.8) |
| Formula basis | 85 per cent of the average CNG price (previously 80 per cent) |
| Compression charge | 8 Rs/kg (unchanged) |
| Minimum price (floor) | 770 Rs/MMBtu (unchanged) |
According to IamRenew, the conversion to kilograms assumes 95 per cent methane in the gas and delivery within 50 km; the source does not state the calorific value used, so treat the values in Rs/kg as indicative. Transport costs up to 50 km are included in the base price. For longer routes a transport surcharge is provided: 1.5 Rs/kg for a distance of 50–75 km and 2.5 Rs/kg above 75 km, paid by the distribution company.
Why the link to the CNG price
In India the CBG price is linked to the CNG price, that is, what a driver pays at the filling station. When CNG becomes more expensive, the biogas procurement price also rises. Raising the basis from 80 to 85 per cent means that producers receive a larger part of the retail price of the fossil fuel. For projects that finance their investment from long-term purchase agreements, this is an important revenue safeguard.
Programme background
CBG is a pillar of India's biogas policy. The SATAT programme and subsequent initiatives are meant to build a network of biogas plants, and from 2025 an obligation to blend CBG with CNG and PNG is being introduced: we write about its schedule in a separate article (CBG blending obligation), and about the GOBARdhan budget in the article on the 2023–24 budget.
The CNG-linked formula means that the procurement price moves together with the price of the fossil fuel, and its lower bound is set by the minimum price of 770 Rs/MMBtu.
Notes for investors
The price applies for a limited period (June to October 2025) and is not fixed for years. In a financial model, therefore, further revisions and the effect of changes in the CNG price should be anticipated. For producers who deliver gas over longer distances, transport surcharges also matter.
Sources
Questions and answers
What is the CBG purchase price for?
It is the price at which Indian gas or fuel distribution companies buy compressed biogas from producers. It gives producers predictable revenue.
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