The oil ministry on Aug 18 approved an incentive scheme for promoting domestic piped natural gas (PNG) connections. The scheme is designed to accelerate the rollout of domestic PNG services.
Effective from Sept 1, 2026, the scheme aims to speed up the expansion of active PNG connections. This will allow more families to use piped gas in their kitchens at the earliest.
The plan directly incentivises City Gas Distribution (CGD) companies to convert unbilled connections into working ones and extend the network into new areas. There are currently 1.74 crore domestic PNG connections across the country.
Eligible CGD entities will receive an extra 200 standard cubic metres (SCM) of domestically produced, lower‑priced APM gas. This will be awarded for each additional billed domestic PNG connection achieved during the performance period, above the threshold set for each area.
Implementation will occur in two tranches over six months. The extra gas allocation will replace the costlier LNG that CGDs currently buy for their compressed natural gas (transport) segment, reducing overall sourcing costs.
The ministry said the resulting cost savings could shorten the payback period for capital expenditure on D‑PNG connections from about 10 years to roughly 3 years. This gives CGDs a strong financial motive to expand household PNG connectivity faster, bringing clean, safe and affordable cooking gas to more Indian households soon.
The government also encourages states to reduce VAT on natural gas to 5 percent. This move will make PNG even more affordable for households.
This initiative comes as LPG supplies have been affected by the blockade of the Strait of Hormuz since the start of the US‑Iran conflict. The new scheme aims to counter the supply disruptions and secure gas for domestic use.