“In 2022, the regulation was focused on pipeline operators. In 2023, the unified tariff shift focused more on the consumer. But this amendment takes care of everyone—pipeline operators, consumers, investors, and CGD companies,” Tiwari said.
The latest changes under the second amendment to the Natural Gas Pipeline Tariff Regulations, 2025, reduce the number of tariff zones from three to two. Crucially, PNGRB is also implementing a uniform tariff for CNG and PNG (domestic) customers—a move expected to sharply reduce transportation costs from ₹110–₹120 per MMBtu to around ₹50–₹55 per MMBtu.
“We have implemented one zone, one tariff for CNG and PNG, and slowly, we are moving toward one tariff on a pan-India basis,” Tiwari said, adding that CGD companies will benefit as this helps them meet their minimum work programmes and infrastructure targets.
Tiwari also said the final tariff order—including for major operators like GAIL and Pipeline Infrastructure Ltd—is expected within two months and will adopt a “balancing approach” on return expectations.
Edited excerpts:
Q: What was the rationale behind the recent amendment to the unified gas tariff, and how does it differ from the earlier regulations?
Tiwari: I would like to share that in 2022, when we announced the regulation, it was in the interest of the pipeline operator. In 2023, when the unified tariff was announced, it was more focused on the interests of the consumers. But this amendment we have announced recently takes care of the pipeline operator, the consumer, the investor and the CGD companies.
Earlier, there were three zones. Now we are going to reduce that to two zones, with the concept of one nation, one grid, and one tariff. Most importantly, we are going to have one tariff for CNG customers as well as PNG domestic customers, because we have set a huge target for CNG stations and around 12 crore-plus targets for PNG domestic consumers. Tariff plays an important role in the total cost. We are going to have one tariff for CNG and PNG. I think the CGD companies can take advantage of this in achieving their minimum work programme, and for CNG stations as well. That is the concept behind it.
Q: If we are at two zones right now, if my understanding is correct, will you bring it down to one zone, something like that?
Tiwari: We have partly done that already. We have implemented one zone, one tariff for CNG and PNG, and slowly, we are going to move toward one tariff on a pan-India basis. This will be done gradually, after proper analysis.
Q: What happens to this one zone now? I mean, does that also remain, or will you have a sectoral approach?
Tiwari: We may have.
Q: Could you please elaborate?
Tiwari:
CNG and PNG are the customers whom we have given targets. Entities have been given targets, and the minimum work programme is there. On a pan-India basis, we have allotted 300-plus geographical areas. So, I think CNG and PNG will have one tariff, and the remaining segments may have one tariff in the days to come.
Q: How many years would this take? A year or two years down the line?
Tiwari: We have concluded these tariff reforms within two years. So maybe within one year.
Q: And what happens to the end-user rates under the current tariff regulations, the fresh ones that you have brought out?
Tiwari: For CNG and PNG players, the rates will reduce because the tariff, which is currently around ₹110–₹120 per MMBtu for transportation, is going to be drastically reduced. As per the tariff order regulations, it is 52.5% of the second zone rate. If we assume the second zone is ₹110–₹120 per MMBtu, the new rate will be in the range of ₹50–₹55 per MMBtu, or somewhere around that.
Q: Net-net, what has been the response from CGD players themselves? I mean, good, positive, or not that happy?
Tiwari: They have participated in the open discussion and shown interest. I have received phone calls from many CGD players, and they are happy. We are going to announce the tariff order soon, after due deliberation.
Q: How does it really benefit the city gas players? I mean, it brings down the input cost, but at the same time, the end-user rates will also have to be reduced. So, it’s a bit of a balancing act for them, right?
Tiwari: Once the input cost comes down—because, as I have said, the tariff is one of the important input costs—the consumer will benefit from reduced rates for CNG and PNG.
Q: When do you plan to bring out the tariff order?
Tiwari: We have recently amended the regulations. Now we are going to ask for details from the settlement committee, as per the regulations. There are some important pipeline operators, like GAIL and Pipeline Infrastructure Limited. Their tariff orders are in process. The public consultation has already been concluded. That is also on the cards. So, we will bring the tariff order for these together. We want to synchronise this because issuing tariff orders again and again is not ideal.
Q: When can we expect the order for GAIL? Would it be within a month or two?
Tiwari: Maximum, two months.
Q: They have also made a recommendation for a 33% increase. So broadly, where do we stand on that as of now? Would it be somewhere in line with what the company has sought, or will the regulator take a more balanced approach?
Tiwari: We always try to ensure a reasonable return to the pipeline operators. We have analysed what they have submitted, and we are going to act on that. Maybe a balancing approach will be adopted.
I would also like to mention that system use of gas is an important component of OPEX for them. We have already brought a regulation on how to reduce the cost of system use gas. They have to plan for 75% of their estimated quantity—whether sourced domestically or from the international market—on a long-term basis for three years. They have to allocate the least-cost option available for system’s use of gas so that the cost can be reduced. All these factors are being analysed and we are going to take a view and conclude the tariff order very soon.
