The government has granted approval for an incentive scheme aimed at accelerating the establishment of domestic piped natural gas (PNG) connections across India. This initiative is designed to facilitate access to clean, safe, and affordable cooking gas for households nationwide. Known as the Incentive Scheme for Promotion of Domestic PNG Connections, it is scheduled to take effect on September 1, 2026.

Under this new scheme, City Gas Distribution (CGD) companies will be encouraged to transform inactive or unbilled PNG connections into operational ones, while also extending gas networks to new regions. The initiative seeks to bolster household connectivity to natural gas, thereby benefiting a significant number of consumers.

Mechanics of the Initiative

As of now, India hosts approximately 1.74 crore domestic PNG connections. The incentive scheme will enable qualifying CGD entities to receive an additional allocation of 200 Standard Cubic Metres (SCM) of domestically produced, lower-priced APM gas. This gas will be provided for every incremental billed domestic PNG connection established beyond a specified threshold set for the respective geographical area.

The implementation of the scheme will occur in two six-month phases. The extra domestic gas allocation is intended to substitute the higher-cost liquefied natural gas (LNG) that CGD companies currently utilise for their compressed natural gas (CNG) transport segment, ultimately aiding in the reduction of overall gas sourcing expenses for these companies.

The government anticipates that the financial advantages stemming from this scheme could significantly shorten the payback period for investments made in domestic PNG connections, decreasing it from around ten years to nearly three years. This change is expected to incentivise companies to expedite the expansion of household gas connections.

Benefits of Piped Natural Gas for Households

Piped natural gas presents a number of benefits when compared to traditional liquefied petroleum gas (LPG) cylinders and other conventional cooking fuels. The gas is delivered through underground pipelines at low pressure, which eliminates the requirement for storage and handling of heavy cylinders. Additionally, because PNG is lighter than air, it disperses quickly in the event of a leak, thereby enhancing safety.

Another advantage of PNG is the continuous supply it offers, allowing households to avoid the hassle of booking or replacing cylinders. Billing is based on actual metered consumption, facilitating more economical usage. Furthermore, the government asserts that due to its cleaner-burning properties, PNG produces reduced emissions and pollutants, contributing to improved indoor air quality and lower carbon emissions.

Initiatives to Promote PNG Usage

This incentive scheme forms part of a larger governmental strategy aimed at expanding household access to PNG. Additional measures include streamlining regulatory clearances and standardising Right-of-Way charges. The government is also working to reduce the value-added tax (VAT) on natural gas to 5% and launching the National PNG Drive 2.0 to encourage households and housing societies to transition from LPG to piped natural gas.

Furthermore, a unified digital platform is currently under development, which will facilitate the application process for and tracking of new PNG connections. This initiative is expected to simplify the experience for users and further promote the uptake of piped natural gas across diverse demographics.

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