From pegging Goods and Services Tax rate on a par with that on electric vehicles to waiving excise duty on compression of natural gas and on the compressed biogas component in the fuel, India’s Petroleum and Natural Gas Regulatory Board (PNGRB) wants for a clutch of changes to accelerate compressed natural gas (CNG) vehicle usage.

It also wants maintaining a delta between CNG and petrol prices to keep the interest in the former going, primarily by tweaking excise duty rates. Reduction in allocation of CNG at administered prices or under the APM remains a concern and could upset the calculations, a document prepared by the oil regulator earlier but made public now showed.

Listing the policy interventions required, PNGRB said the transport segment will be a key driver to push up the share of natural gas in India’s energy mix to 15% by 2030 from the existing around 6%. Towards this, it wanted GST on CNG vehicles to be reduced, from 28% to the 5% that levied on EVs.

On changes to excise duty, the regulator said compression of natural gas, which is undertaken to fill more fuel in the tank and consequently increase vehicle range, is considered as deemed manufacturing. No excise duty would translate into lower CNG prices for consumers and consequent benefits to the environment from use of the eco-friendly fuel.

Also with APM allocation headed towards zero in future, reduction in excise duty is necessary to keep CNG competitive compared to other alternate fuels. Full excise duty waiver will have an immediate impact of ₹6500-7000 crore a year for the exchequer, but bring multiple benefits, including reduction in healthcare costs.

On CBG blending, the regulator said the additional excise and VAT that CBG attracts impacts the final price of CNG.

Earlier this week, the PNGRB Board approved the Second Amendment to the Natural Gas Pipeline Tariff Regulations, 2025, which included reducing the number of Unified Tariff Zones from three to two to simplify natural gas transportation system across the country, ensures a more equitable tariff structure and enhance access to natural gas, especially in under-served regions. It said the benefit of the Unified Zonal Tariff of Zone 1 has been extended countrywide to CNG and Piped Natural Gas (PNG) Domestic segments to enhance the affordability of the fuel.