Govt approves incentive scheme for gas distributors to speed up household PNG connections

The Centre has approved an incentive scheme for city gas distributors to increase domestic connections of piped cooking gas. This move comes as the US-Iran conflict disrupts fuel shipments and raises import costs. The Incentive Scheme for Promotion of Domestic PNG Connections will start from September 1, 2026.

The scheme is part of India's effort to address gaps in its distribution network and speed up the shift to piped gas amid the cooking gas crisis caused by the Middle East war. The government aims to reduce LPG imports and subsidy spending while making cooking gas available to more households through domestic PNG connections.

Under the scheme, city gas distribution companies will receive an additional 200 standard cubic metres of cheaper, domestically produced APM gas for every incremental billed domestic PNG connection above a set threshold for the respective area. The government said this will encourage companies to convert inactive or unbilled PNG connections into active, paying customers and extend pipeline networks to new households.

MUST READ | No more waiting for an LPG connection? BPCL rolls out Bharatgas Lite ZIP with 10-kg fibre composite cylinder

The scheme will be implemented in two six-month tranches. The additional domestic gas allocation will replace costlier LNG currently used by city gas distribution companies for their CNG transport segment, lowering overall gas-sourcing costs. The government said the savings could reduce the payback period for investments in domestic PNG connections to nearly three years from around 10 years at present.

Since the start of the war, suppliers such as Indraprastha Gas, Mahanagar Gas, GAIL Gas and Bharat Petroleum Corp have offered incentives like reductions in installation charges for piped gas connections. India currently has about 17.4 million domestic PNG connections compared with about 331.4 million active household LPG customers as of July 1.

India is the world’s second-largest liquefied petroleum gas importer, meeting about 60% of its LPG requirement through imports. It imported about 22 million metric tonnes of LPG in 2025, mostly from the Middle East, at a cost of nearly $12 billion.

DON'T MISS | Need an LPG connection fast? BPCL's new Bharatgas Lite ZIP promises instant setup, quick delivery

The government said PNG has several advantages that support wider household use. It is supplied through underground pipelines at low pressure, eliminating the need to store and handle cylinders. PNG is lighter than air and disperses quickly in case of a leak. Households do not need to book or replace cylinders because supply is continuous and billing is based on actual metered consumption.

The Centre added that PNG is a cleaner-burning fuel that produces fewer pollutants, helping improve indoor air quality and lower carbon emissions.