Government Launches New Scheme to Boost Domestic Piped Natural Gas Connections
Incentive Scheme for Domestic PNG Connections
The Indian government has announced a new incentive program aimed at enhancing the reach of domestic piped natural gas (PNG) connections, ensuring that more households can access clean, safe, and affordable cooking fuel. This initiative is set to commence on September 1, 2026.
The scheme, known as the Incentive Scheme for Promotion of Domestic PNG Connections, is intended to motivate City Gas Distribution (CGD) companies to transition unbilled PNG connections into active, billed ones and to extend their networks into previously unserved areas.
Currently, India boasts approximately 17.4 million domestic PNG connections. Under this new initiative, CGD companies will earn incentives for each additional billed domestic PNG connection they establish beyond a predetermined threshold for their specific regions.
Participating CGD entities will also receive an extra allocation of 200 SCM of domestically sourced, lower-cost APM gas for each new billed domestic PNG connection made during the designated performance period. The rollout of this scheme will occur in two phases over six months.
This additional APM gas allocation is anticipated to enable CGD companies to replace more expensive liquefied natural gas (LNG) currently used in their Compressed Natural Gas (Transport) segment, thereby reducing overall gas procurement costs and enhancing the financial motivation to expand domestic PNG connections.
The government estimates that these savings could significantly shorten the payback period for capital investments in domestic PNG connections from around ten years to roughly three years, encouraging CGD companies to expedite their network expansion and connect more households to piped cooking gas.
For consumers, PNG presents numerous benefits compared to traditional cooking fuels. Unlike LPG cylinders, which require booking, storage, and replacement, PNG is delivered directly to homes via underground pipelines. Billing is based on actual metered usage, similar to electricity and water services.
Additionally, PNG is deemed safer as it is supplied at low pressure and is lighter than air, allowing for quick dispersion in case of a leak. As a cleaner-burning fuel, it generates fewer pollutants than many conventional cooking options, contributing to better indoor air quality and reduced carbon emissions.