Indian Biogas Association demands ₹90 per kg fixed rate for compressed biogas procurement

Indian Biogas Association (IBA) is demanding a fixed rate of ₹90 per kg for procurement of biogas by oil and gas marketing companies from the Government, citing environmental benefits and to boost the sector.

The IBA will soon put up the suggestion about fixing the procurement price of the biogas, along with other recommendations, for boosting the sector before the newly appointed Union Minister of New and Renewable Energy Pralhad Joshi.

While the retail selling price of compressed biogas (CBG) is aligned with CNG (compressed natural gas), the procurement price is unfortunately linked to the retail selling price (RSP) of CNG, IBA Chairman Gaurav Kedia told PTI.

Consequently, he said with CNG prices in New Delhi hovering at ₹75-80 per kg, the procurement price of CBG by oil and gas marketing companies falls to ₹59 per kg (excluding GST).

“This pricing structure fails to recognise the inherent environmental value of CBG. Ideally, CBG should command a premium (of ₹10-15), reflecting its green credentials. It should be around ₹90 per kg,” he said.

The implementation of the SATAT (Sustainable Alternative Towards Affordable Transportation) programme is expected to significantly reduce the country’s import bill by $15 billion, representing roughly 10 per cent.

SATAT is a Government initiative to promote CBG as an alternative, green transport fuel.

“The current offtake price of CBG is pegged to a discounted retail price of CNG, which is counter-intuitive, considering the critical need to prioritise climate change mitigation,” Kedia said.

“To incentivise biogas producers and accelerate industry growth, the Government needs to establish a more efficient and rational pricing mechanism,” he said.