(Reuters) – India on Friday said it has introduced enhancements to the domestic gas allocation policy with an aim to strengthen the framework for sustained availability and affordability of natural gas.
Under these new directions, from the first quarter of fiscal 2026, domestic natural gas allocations for compressed natural gas (CNG) and piped natural gas (PNG) segments will be done on a two-quarter advance basis, the government said in a statement.
Allocation will also now include new well gas (NWG) from nomination fields of the two state explorers, Oil and Natural Gas Corporation and Oil India with auction-based allocation for new well gas being replaced with a quarterly pro-rata allocation, to ensure timely and reliable supply, the statement added.
With both administered pricing mechanism gas (APM) and new well gas prices linked to Indian crude basket prices, which are calculated monthly, the government sees the allocation of domestic gas to make natural gas more affordable for CNG and PNG consumers after recent decline in crude prices.
The allocation of natural gas sold under government-set APM has fallen over the years because of lower output at domestic wells. This has led to India’s city gas distribution companies like Mahanagar Gas, Indraprastha Gas, Gujarat Gas seeing their margins squeezed in last few quarters.
These policy measures come at a time when the government has cut APM gas allocation to city gas distribution companies by 18%-20%, effective April 16.
(Reporting by Ashish Chandra in Bengaluru, Editing by Franklin Paul)
