The Petroleum and Natural Gas Regulatory Board (PNGRB) has reduced India’s unified tariff zones for natural gas from three to two under its Second Amendment to the Natural Gas Pipeline Tariff Regulations, 2025. The approval aims to enhance affordability and accessibility of natural gas, particularly benefiting urban households and underserved regions.

Zone 1’s lower unified tariff will now apply nationwide to both compressed natural gas (CNG) and piped natural gas (PNG) domestic segments, promoting broader clean energy adoption. The previous three-zone structure, based on distance from the gas source, is now simplified, with the 2024–25 levelised unified tariff set at ?80.97/mmBtu. Additionally, a new pipeline development reserve will be funded by 50 percent of post-tax earnings from operators with over 75 percent pipeline utilisation—half to support infrastructure, the rest passed on to consumers through tariff adjustments.

Pipeline operators must now procure 75 percent of system-use gas via long-term contracts, stabilising pricing. With 24,945 km of operational pipeline and targets of 120 million PNG and 17,500 CNG stations by 2030, the reform supports significant CGD sector growth and India’s clean energy goals.