Watch: Is biogas the next big fuel?

The 2026 Strait of Hormuz crisis — triggered by the US-Iran conflict — has disrupted approximately 50% of India's crude oil and most of its LPG supply that t...

What Happened

The 2026 Strait of Hormuz crisis — triggered by the US-Iran conflict — has disrupted approximately 50% of India's crude oil and most of its LPG supply that transits through the strait.
In response to the supply shock, the central government raised petrol and diesel prices — the first such hike in four years — and increased CNG prices.
India imports over 85% of its crude oil requirement (~5.5 million barrels/day), making it acutely vulnerable to disruptions in West Asian supply routes.
The energy crisis has renewed attention on Compressed Biogas (CBG) — produced from organic waste — as a domestically available, renewable alternative to fossil CNG that can reduce import dependence.
Budget 2026-27 announced an excise duty exemption on CBG content in blended CNG, and a mandatory blending obligation requiring 1% CBG in CNG/PNG from FY 2025-26, scaling to 5% by FY 2028-29.

Static Topic Bridges

Compressed Biogas (CBG) vs Conventional CNG — Definitions and Composition

Biogas is a mixture of gases — primarily methane (~55–60%) and carbon dioxide (~35–40%) — produced by the anaerobic digestion of organic matter (crop residue, cattle dung, municipal solid waste, sewage sludge). When biogas is purified to remove CO2 and other impurities and compressed, it becomes Compressed Biogas (CBG), also called Bio-CNG.

Methane content: CBG contains >90% methane (comparable to conventional CNG from fossil gas at ~87–99% methane), making it a drop-in fuel — usable in existing CNG vehicles and gas pipelines without modification.
Energy value: CBG has a calorific value of ~52,000 kJ/kg; CNG is ~50,000–56,000 kJ/kg — essentially equivalent.
Conventional CNG is derived from fossil natural gas extracted from geological reservoirs; India imports significant quantities as LNG (Liquefied Natural Gas) — worth approximately $14.98 billion in 2024.
Key difference: CBG is renewable (produced from waste; carbon-neutral cycle), while conventional CNG is a fossil fuel subject to import dependency and price volatility.
Feedstocks for CBG: agricultural residues, cattle/poultry manure, municipal solid waste, press mud from sugar mills, sewage sludge.

Connection to this news: India produces enormous quantities of organic waste annually. The Hormuz crisis makes the case for a domestic, waste-based fuel alternative far more urgent — CBG can displace imported LNG and reduce the current account deficit on energy imports.

SATAT Scheme — Sustainable Alternative Towards Affordable Transportation

The SATAT (Sustainable Alternative Towards Affordable Transportation) scheme is the central government's flagship programme to build a CBG production and supply ecosystem in India.

Launched: October 1, 2018 by the Ministry of Petroleum and Natural Gas.
Target: Establishment of 5,000 CBG plants producing 15 million tonnes of CBG per year.
Mechanism: Oil Marketing Companies (OMCs) — IOCL, BPCL, HPCL — enter into agreements to purchase CBG from producers at predetermined prices; this assured offtake de-risks investment.
Current status (2026): Approximately 108 commissioned plants against the 5,000-plant target — indicating a large implementation gap despite the policy architecture.
Budget 2026 boost: Excise duty exemption on CBG component in blended CNG; revised OMC procurement pricing; mandatory blending obligation (1% from FY26, scaling to 5% by FY29) transforms voluntary demand into a legal obligation.
The blending mandate is administered by the Petroleum and Natural Gas Regulatory Board (PNGRB).

Connection to this news: The Hormuz crisis and resulting fuel price hikes have created strong economic and strategic motivation to accelerate SATAT implementation. The 2026 Budget incentives are directly designed to address the weak demand that held back plant commissioning.

India's Energy Security Framework — Import Dependence and Diversification

Energy security refers to the availability of energy at affordable prices without vulnerability to external supply disruptions. India's energy profile is characterized by high import dependence, making it structurally exposed to geopolitical risks.

Oil import dependence: India imports 85%+ of crude oil; it is the world's third-largest oil importer and fourth-largest LNG importer.
West Asia dependence: A significant share of India's oil imports originates from the Gulf region, with a large portion transiting through the Strait of Hormuz — a critical maritime chokepoint.
Strait of Hormuz: ~20–21 million barrels of oil per day pass through it globally; approximately 50% of India's crude and most of its LPG transited through it before the 2026 disruption.
India's energy diversification strategy involves: (i) importing from ~40 countries, (ii) building strategic petroleum reserves (SPR) under the Indian Strategic Petroleum Reserves Limited (ISPRL), (iii) promoting domestic oil production, (iv) accelerating renewables and alternative fuels (CBG, hydrogen, ethanol blending).
National Biofuel Policy (2018, revised 2022): provides the overarching framework for biofuels including biogas; sets indicative blending targets for ethanol, biodiesel, and bio-aviation fuel.

Connection to this news: The 2026 crisis is an acute manifestation of India's chronic energy vulnerability. CBG addresses multiple dimensions simultaneously: it is domestically produced (energy security), renewable (climate commitments), waste-based (waste management), and can replace imported LNG (current account improvement).

Strait of Hormuz — Strategic Geography and India's Exposure

The Strait of Hormuz is a narrow waterway between the Arabian Gulf (Persian Gulf) and the Gulf of Oman, connecting to the Arabian Sea. It is the world's most critical oil transit chokepoint.

Location: Between Iran (north) and Oman/UAE (south); minimum width approximately 33 km at the narrowest point.
Oil transit: Approximately 20% of global oil consumption and 30% of seaborne oil trade passes through it daily.
India's exposure: 50%+ of crude oil and most LPG for Indian households and commercial users passed through the strait before the 2026 disruption.
Alternatives: In the event of Hormuz closure, alternative routes include the Suez Canal-Mediterranean route and overland pipelines — all significantly longer and more expensive.
India's response to the 2026 crisis has included diversification to Russian crude and exploration of alternative suppliers from Africa and the Americas.

Connection to this news: The article directly connects the Hormuz crisis to India's domestic fuel price hike, establishing why a domestic fuel like CBG that is entirely insulated from West Asian geopolitics represents a strategic asset.

Key Facts & Data

India crude oil import dependence: 85%+ of requirement (~5.5 million barrels/day)
India's rank as oil importer: third-largest globally
LNG imports (2024): approximately $14.98 billion
Share of crude/LPG routed through Strait of Hormuz (pre-crisis): ~50% of India's crude supply
Petrol/diesel price hike: first in four years (2026)
SATAT scheme launch: October 1, 2018, Ministry of Petroleum and Natural Gas
SATAT target: 5,000 CBG plants, 15 million tonnes/year CBG production
Commissioned plants as of 2026: approximately 108 (against 5,000 target)
CBG blending mandate: 1% in CNG/PNG from FY 2025-26; 5% by FY 2028-29
CBG methane content: >90% (comparable to conventional CNG)
CBG calorific value: ~52,000 kJ/kg
National Biofuel Policy: 2018 (revised 2022), Ministry of Petroleum and Natural Gas