PNGRB committee recommends restoring priority APM Gas allocation to CNG

The Petroleum and Natural Gas Regulatory Board (PNGRB) has published the report of the High-Level Expert Committee chaired by former Petroleum Secretary DK Sarraf, to evaluate challenges faced by India’s City Gas Distribution (CGD) sector and recommend policy interventions. The committee was formed in 2024.

A key recommendation is the restoration of priority APM gas allocation for the CNG (Transport) segment. The committee notes that CNG plays a critical role in affordable public mobility and urban air quality improvement. It suggests that even in the event of APM gas shortages, allocation cuts should be shared uniformly across all APM-consuming sectors, rather than disproportionately impacting the CNG segment. This would ensure price stability, equitable distribution, and support the continued expansion of CGD networks.

The committee also proposes a significant shift in regulatory alignment by calling for Compressed Biogas (CBG) to be recognized under the Corporate Average Fuel Efficiency (CAFE) framework. Since CBG is a carbon-negative fuel, recognizing it under CAFE norms would incentivize automakers to adopt and promote CNG-CBG vehicle engines. Additionally, the committee recommends setting stricter CO₂ emission targets that favor CNG vehicles, ensuring OEMs continue to prioritize natural gas mobility solutions alongside EVs and hydrogen.

Another key recommendation is to formally include CNG vehicles under India’s Vehicle Scrappage Policy, alongside EVs and hydrogen vehicles. Extending scrappage incentives to CNG vehicles would accelerate the replacement of older, polluting internal combustion engine vehicles and promote adoption of low-emission mobility at scale. The report frames CNG as a strategic transition fuel in India’s Net Zero Roadmap.

While electric and hydrogen technologies represent the long-term destination, CNG offers immediate emissions reduction benefits, cost efficiency, and compatibility with existing infrastructure. Therefore, integrating CNG into the national decarbonisation roadmap would ensure a phased and realistic transition pathway.

To drive adoption, the committee suggests nationwide mandates for use of CNG in public transport and commercial vehicles, especially in cities with high pollution levels, building on the proven success of Delhi and Mumbai.

Further, it proposes that large fleet operators (such as in mining, cement, and logistics) be required to convert at least 20% of their vehicles to CNG. Finally, to support smaller fleet operators economically, the committee recommends allowing a five-year life extension for diesel trucks retrofitted to CNG under the scrappage framework.

Collectively, the recommendations highlight a coherent policy strategy to reinforce CNG and CBG as central pillars of India’s near-term clean mobility transition, while enabling a balanced move toward long-term zero-emission solutions.

In response to the news, shares of India's City Gas Companies, IGL, MGL and Gujarat Gas saw a brief spike. While IGL cooled off from the day's high, MGL has gained as much as 2.5%.