Two zones, one vision
PNGRB’s Natural Gas Tariff Reform 2025 Simplifies Zonal Structure: In July 2025, the Petroleum and Natural Gas Regulatory Board (PNGRB) approved the Second Amendment to Natural Gas Pipeline Tariff Regulations. The reform aligns with the national goal of “One Nation, One Grid, One Tariff.” It aims to simplify pipeline logistics, boost investment, and protect consumer interests.
Zonal structure simplified
Earlier, the tariff regime had three Unified Tariff Zones. The amendment has reduced this to just two zones, making it easier for consumers and operators to understand and manage gas transportation costs.
Zone 1 now offers a more affordable unified tariff, and this benefit has been extended across the country for Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) Domestic segments. This change will help make clean fuel cheaper for urban and rural households.
Static GK fact: PNG is commonly used in Indian households for cooking, and CNG powers public transport in cities like Delhi, Mumbai, and Ahmedabad.
Fuel procurement norms tightened
The new amendment makes it mandatory for pipeline operators to procure at least 75% of their annual system-use gas through long-term contracts lasting three years or more. This move is expected to reduce procurement risks and lower the transaction costs of sourcing fuel in the open market.
Static GK Tip: Long-term fuel contracts are preferred in the energy sector to ensure price stability and uninterrupted supply.
Pipeline Development Reserve introduced
To ensure a sustainable and growth-oriented infrastructure model, PNGRB has introduced a Pipeline Development Reserve. Here’s how it works:
- If any pipeline entity achieves more than 75% utilization, a portion of its profits (after tax) will be pooled into this reserve.
- 50% of these earnings will be reinvested into infrastructure.
- The other 50% will be passed on to consumers in the form of tariff reductions.
This creates a performance-linked and self-sustaining mechanism, encouraging efficiency in operations.
PNGRB’s role and mandate
Established under the Petroleum and Natural Gas Regulatory Board Act, 2006, PNGRB is the chief regulator for India’s downstream petroleum and natural gas sector.
Major responsibilities of PNGRB include:
- Regulating refining, transportation, storage, and marketing of petroleum products and natural gas (except production).
- Registering entities involved in marketing petroleum products.
- Promoting fair trade and ensuring consumer protection.
- Maintaining a national databank on the petroleum and natural gas sector.
- Decisions of the PNGRB can be appealed before the Appellate Tribunal for Electricity under the Electricity Act, 2003.
Static GK fact: India’s natural gas pipeline network spans over 22,000 km, covering major industrial corridors.
Static Usthadian Current Affairs Table
PNGRB’s Natural Gas Tariff Reform 2025 Simplifies Zonal Structure:
| Topic | Detail |
| Regulating Authority | Petroleum and Natural Gas Regulatory Board (PNGRB) |
| Parent Act | Petroleum and Natural Gas Regulatory Board Act, 2006 |
| New Tariff Zones | Reduced from 3 to 2 |
| Benefit Extension | CNG and PNG Domestic now enjoy Zone 1 tariff nationwide |
| Fuel Procurement Rule | ≥75% through long-term (≥3 years) contracts |
| Pipeline Development Reserve | Created from profits of high-performing pipeline entities |
| Profit Sharing Mechanism | 50% reinvested, 50% passed to consumers |
| Appeals Mechanism | Appellate Tribunal for Electricity under Electricity Act, 2003 |
| Vision Statement | One Nation, One Grid, One Tariff |
| Use of PNG | Household cooking fuel in urban India |
