Page 45 - Policy Economic Report - April 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

households for cooking, the Ministry of Petroleum and Natural Gas (MoP&NG) has introduced the
following important enhancements to the Domestic Gas Allocation Policy:

1. Advance Quarterly Allocation:

• From Q1 FY 2025-26, domestic natural gas allocations for CNG (T) and PNG (D) segments will be
done on a two-quarter advance basis.

• Allocation will also now include New Well Gas (NWG) from nomination fields of ONGC and OIL.
• Estimations by GAIL and ONGC will help ensure supply visibility to CGD entities in advance,

enhancing planning and delivery efficiency.

2. NWG Allocation on Pro-Rata Basis:

• Auction-based allocation for NWG has been replaced with a quarterly pro-rata allocation to
ensure timely and reliable supply.

• GAIL will allocate NWG to CGD entities in proportion to their requirements, in accordance with
prevailing MoP&NG guidelines.

3. Allocation Ratios maintained:

• Despite increasing demand in the CGD sector, allocation ratios of domestic gas have broadly been
maintained:
o Q3 2024–25: 54.68% of projected demand allocated
o Q1 2025–26: 55.68% allocation
o Q2 2025–26 (Projected): 54.74% allocation

• Broad trajectory in domestic gas allocation reflects the Government’s commitment to prioritize
public-facing segments like transport and domestic cooking.

4. Pricing Linked to Indian Crude Basket:

• As both APM gas and New Well Gas prices are linked to Indian Crude Basket prices, calculated
monthly, with the recent decline in crude prices, this allocation of domestic gas would make
natural gas more affordable for CNG (T) and PNG (D) consumers.

These strategic measures by the Government will lead to enhanced ability of CGD entities to forecast
demand and manage supply efficiently, improved supply predictability and better affordability for CGD
companies due to crude-linked pricing. These measures will ensure a stable, affordable, and transparent
domestic gas supply system for the critical transport and domestic segments under the CGD network,
benefitting millions of urban and semi-urban consumers across India.

Target of Doubling Energy Efficiency

The Government has prepared plans across key sectors namely Industry, Buildings (including appliances),
Transport and Others/Miscellaneous. By implementing these plans, it is aimed to reduce the energy

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