CNG Sector Likely to Benefit as PNGRB Committee Pushes for Priority APM Gas

The City Gas Distribution (CGD) sector in India may be poised for renewed growth momentum following the latest recommendations from the Petroleum and Natural Gas Regulatory Board (PNGRB) committee. The report, led by a high-level panel formed in 2024, focuses on strengthening the policy framework around CNG and Compressed Biogas (CBG) to ensure sustainable mobility and fair energy distribution.

Priority Allocation for CNG Regains Focus

A key proposal of the committee is the restoration of priority APM (Administered Pricing Mechanism) gas allocation to the CNG (Transport) segment. This measure is expected to ensure stable pricing and equitable access to natural gas supplies. The committee highlighted that CNG contributes significantly to public transport affordability and urban air quality improvement. 

It also recommended that, during APM gas shortages, allocation reductions be distributed evenly across all sectors instead of impacting the CNG segment disproportionately. Such an approach could help maintain supply stability and support the continuous expansion of CGD networks across India.

Recognition of CBG Under CAFE Framework

In another notable recommendation, the committee proposed including Compressed Biogas (CBG) under the Corporate Average Fuel Efficiency (CAFE) framework. Since CBG is a carbon-negative fuel, its recognition under CAFE (Corporate Average Fuel Efficiency) norms could motivate automobile manufacturers to produce CNG-CBG compatible vehicles. 

This would also align with India’s emission goals by promoting fuel-efficient mobility options. The committee suggested tightening CO₂ emission targets to give CNG vehicles a regulatory advantage, ensuring that natural gas mobility continues to complement electric and hydrogen technologies in the clean energy transition.

Boost to CNG Vehicles Under Scrappage Policy

The report further suggested including CNG vehicles under the Vehicle Scrappage Policy, extending incentives similar to those provided for electric and hydrogen vehicles. This move aims to accelerate the shift away from older, polluting vehicles and promote low-emission alternatives. The committee emphasised that CNG serves as a vital bridge fuel in India’s journey toward net zero, offering immediate emission reductions and compatibility with current infrastructure.

Additionally, it recommended mandates for the adoption of CNG in public and commercial transport fleets, especially in pollution-prone urban centres. Large operators in logistics, mining, and manufacturing could be required to convert at least 20% of their fleets to CNG, while smaller operators might benefit from a five-year life extension for retrofitted diesel trucks.

Market Reaction and Outlook

Following the release of the report, shares of major CGD players witnessed brief gains. Indraprastha Gas Share Price stood at ₹211 (up 0.84%) as of November 11, 2025, 12:47 PM, with a market capitalisation of ₹29,512 crore. Mahanagar Gas Share Price was ₹1,238 (up 2.22%) as of November 11, 2025, 12:47 PM, with a market capitalisation of ₹12,229 crore.

Read More:India’s Natural Gas Consumption To Surge 60% By 2030 And More Than Double By 2040: PNGRB Study

Conclusion

The PNGRB committee’s recommendations mark a significant step toward strengthening India’s clean mobility framework. By restoring priority APM gas allocation to the CNG segment and recognising CBG under the CAFE framework, the proposals aim to ensure stable fuel supply, promote sustainable transport, and support emission reduction goals. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.