PNGRB flags irregular PNG pricing by CGD firms, calls for uniform tariffs: Report

In a public notice issued on Monday, PNGRB highlighted concerns around use of telescopic pricing models—a system where the per-standard cubic meter (SCM) rate rises as household consumption increases. PNGRB warned that this mechanism could be enabling the misuse of subsidised Administered Price Mechanism (APM) gas, intended for domestic use, by commercial entities misclassified as household consumers, according to the report.

The issue centres around APM gas, which is allocated to CGD companies at subsidised rates to promote clean and affordable energy access for residential and transport sectors. Despite clear guidelines issued by the Ministry of Petroleum and Natural Gas in August 2022 for its use in domestic PNG and CNG for transport, the Board observed a lack of uniform pricing to end users.

According to the regulator, genuine domestic consumers—particularly large families or those with specific energy needs—are being penalised with higher tariffs when they exceed certain usage thresholds. This, goes against the intent of the subsidy policy and erodes equity in gas access, PNGRB noted.

PNGRB has also directed CGDs to verify consumer classification to prevent commercial users from accessing subsidised domestic gas and adopt uniform pricing for all residential consumers, irrespective of usage volume.

PNGRB added that these corrective steps are vital to uphold fairness, transparency, and consumer rights as per Section 11 of the PNGRB Act, which mandates the promotion of fair trade and competition in the natural gas sector.