In a major push to modernize India’s natural gas market, the Petroleum and Natural Gas Regulatory Board has outlined reforms to transform the Indian Gas Exchange into a globally regional gas exchange with global benchmarks—introducing new products like compressed biogas (CBG) and innovative contract structures.
“Steps to transform the Gas Exchange in India into a global regional gas exchange with a robust, liquid, and diversified trading platform aligned with global benchmarks including innovative contract designs to be taken,” the regulator said in its action plan for 2025-26, adding that it will introduce new products including CBG trading.
Earlier, the Indian Gas Exchange has said that it aims to introduce a CBG certificates scheme to support the implementation of the CBG blending obligation by the government.
Furthermore, to enhance the commercial viability of existing CNG/LCNG (Liquefied to Compressed Natural Gas) stations, PNGRB will soon allow CNG (compressed natural gas) stations to co-retail petrol and diesel.
“To optimize the use of space and enhance the commercial viability of existing CNG/LCNG stations, it is envisaged to enable co-retailing of Motor Spirit (MS) and High Speed Diesel (HSD) at these locations,” the regulator said in its action plan.
The regulator is also planning to set up a petroleum products exchange to provide a transparent, efficient, and regulated environment for the trading of petroleum products, facilitating fair and transparent pricing, supply-demand balance, and market competitiveness.
PNGRB is also keen on promoting pipeline based transportation of petroleum products on a common carrier model while identifying high-volume product movement corridors and engaging with oil marketing companies, private sector, refineries, to identify anchor demand.
It also aims at conceptualising National Product Pipeline Grid for national energy logistics resilience.
Another key area where PNGRB would be focusing on is establishing preparedness for hydrogen in line with its roadmap on hydrogen transportation through pipelines and blending with natural gas.
In March last year, PNGRB had said that it is looking for ways to blend hydrogen with natural gas and transport green hydrogen through natural gas transmission lines.
“Enable non-discriminatory third-party access to pipelines and CGD networks (where exclusivity has expired), improve visibility of infrastructure capacity, and establish clear, predictable regulatory mechanisms such as Unified Tariff Implementation, unbundling of functions, and creation of an Independent Transmission System Operator (TSO),” it said as a part of its action plan for this year.
PNGRB plans a unified tariff regime including gradually migrating to “One Nation One Tariff” for the consumers to eliminate tariff differential between different regions of the country.
In line with this, the regulator recently simplified the pipeline tariff structure, a move which will reduce transportation costs of city gas distribution (CGD) companies, and potentially improve their margins.
PNGRB amended the Natural Gas Pipeline Tariff Regulations 2025, to reduce the number of Unified Tariff Zones from three to two.
“The move will help streamline gas consumption as end-point prices are a combination of landed gas produced and then pipeline transportation, so this unified pipeline tariff will help simplify it,” said Manas Majumdar, Partner and Leader Oil & Gas – PwC India. “Earlier all tariff was by pipelines and then simplified into 3-zone tariff which is now kept to 2-zone, and the tariff increased from zone 1 to zone 2, so with CGD (city gas distribution) companies having postal tariff of zone 1, they get benefit of lower transportation tariff and hence will enhance their profitability,” he said.