Government Revamps Domestic Gas Allocation for Clarity and Stability

The government will allocate natural gas to CNG and piped cooking gas retailers two quarters ahead for better clarity. This move aims to enhance planning, delivery efficiency, and ensure stable, affordable gas supply for city gas companies. It replaces auction-based allocation with a quarterly pro-rata method.

The government announced a policy shift on Friday, allocating natural gas to CNG and piped cooking gas suppliers two quarters in advance. The decision by the Oil Ministry is designed to bring clarity and predictability to key city gas companies that have faced margin pressures.

This allocation adjustment addresses previous issues where cheaper administered price (APM) gas allocations were cut without prior notice, impacting companies like Indraprastha Gas Ltd, Mahanagar Gas Ltd, and Adani-Total Gas Ltd. From April 2025, allocations will occur on a two-quarter basis, incorporating more expensive gas from newly drilled wells by state firms ONGC and Oil India Ltd alongside APM gas.

In a move to ensure reliability and affordability, auction-based gas allocation will shift to a quarterly pro-rata method, with GAIL responsible for distributions. This policy change aligns with the government's commitment to cleaner energy access and urban air quality improvement, prioritizing CNG transport and domestic cooking gas need. The measure promises more predictable supply and stable pricing for consumers.

(With inputs from agencies.)