Context

The Petroleum and Natural Gas Regulatory Board (PNGRB) has approved key amendments to the Natural Gas Pipeline Tariff Regulations, 2025, in line with the government’s vision of “One Nation, One Grid, One Tariff.”

These changes aim to simplify the tariff regime, promote wider access, and improve supply efficiency.

Key Amendments

1. Simplified Unified Tariff Structure

• Unified tariff zones reduced from three to two.
• Intended to streamline the natural gas transportation network and make the tariff regime simpler and more transparent.

2. Lower Tariff (Zone 1) Extended Nationwide

• The lower unified tariff of Zone 1 will now apply across India, benefiting:
  • Compressed Natural Gas (CNG)
  • Piped Natural Gas (PNG), including domestic households
• This is expected to improve affordability and accessibility of clean energy across regions.

3. Mandatory Long-Term Contracts for System-Use Gas

• Pipeline operators must now secure at least 75% of their system-use gas through long-term contracts (minimum duration: 3 years).
• Aims to ensure tariff stability and reliable gas supply.

4. Creation of Pipeline Development Reserve

• Operators with >75% pipeline utilization must:
  • Allocate 50% of post-tax earnings to a Pipeline Development Reserve for infrastructure expansion.
  • Return the remaining 50% to consumers through tariff adjustments.
• Designed to reinvest profits in the sector while sharing benefits with users.

5. Alignment with Government Policy

• The reforms are aligned with the "One Nation, One Grid, One Tariff" vision to create a uniform and efficient natural gas market.
• Finalized after extensive stakeholder consultations to ensure effective and inclusive implementation.

About PNGRB

• Statutory Body under the Petroleum and Natural Gas Regulatory Board Act, 2006.
• Regulates downstream activities in India’s petroleum and natural gas sector (excluding production).
• Functions:
  • Fixing and regulating tariffs for gas transportation and distribution.
  • Dispute resolution with powers similar to a civil court.
  • Maintains a data bank of sectoral activities.
  • Developed the National Hydrocarbon Infrastructure Monitoring System (NHIMS) for real-time tracking of pipelines and infrastructure.

Conclusion

The PNGRB’s 2025 tariff reforms mark a significant step towards creating a transparent, integrated, and consumer-friendly natural gas ecosystem in India. By rationalizing tariffs, incentivizing infrastructure development, and expanding access, the changes aim to support India's energy transition and economic growth.

Source: Economic Times