More homes to get piped gas? Centre unveils incentive scheme to boost domestic PNG connections

For millions of Indian households, cooking gas could soon arrive through a pipeline rather than a cylinder. The Centre has approved a new incentive scheme aimed at accelerating the expansion of active domestic piped natural gas (PNG) connections, with the programme set to take effect from September 1, 2026.

The move is aimed not just at adding new connections but also at getting existing unbilled or inactive PNG connections into regular use. The government believes that improving the economics for city gas distribution (CGD) companies could encourage them to invest more aggressively in household connectivity.

How the PNG incentive scheme will work 

Under the Incentive Scheme for Promotion of Domestic PNG Connections, eligible CGD entities will receive an additional allocation of 200 standard cubic metres (SCM) of domestically produced, lower-priced APM gas for every incremental billed domestic PNG connection achieved above a prescribed threshold for their geographical area.

The incentive is aimed at gas distributors rather than being a direct cash benefit for consumers.

The additional allocation will be significant because CGD companies can use the cheaper domestic gas allocation to substitute some of the costlier LNG they currently procure for their CNG transport business. That can lower their overall gas-sourcing costs and improve the economics of expanding the household PNG network.

Why the government is pushing PNG 

India has expanded its city gas distribution network significantly, but installing a pipeline connection does not automatically translate into an active customer. The government wants distributors to bridge that gap by converting existing inactive or unbilled connections into functioning, billed connections while extending pipelines into areas that remain outside the network.

There are currently around 1.74 crore domestic PNG connections across the country. The incentive is designed to make each additional household connection more commercially attractive for CGD companies.

Payback period could fall sharply 

One of the biggest hurdles to expanding household PNG connectivity is the upfront investment required for pipelines and connections. The government estimates that the cost savings generated by the scheme could bring down the payback period for capital expenditure on domestic PNG connections from around 10 years to approximately three years.

That could materially change the calculation for CGD companies.

A shorter payback period gives distributors a stronger reason to spend on network expansion, pursue households with inactive connections and accelerate customer activation.

What it means for households 

For consumers, the immediate objective is greater availability of piped cooking gas. Unlike LPG cylinders, PNG is delivered continuously through a pipeline, eliminating the need to order, store and replace cylinders.

The government is positioning PNG as a clean, safe, convenient and affordable cooking fuel, and the new incentive is intended to help bring these benefits to more households.

However, the scheme does not itself mean that households will receive free PNG connections or a direct subsidy. Its primary mechanism is to reduce the sourcing costs and improve the investment economics of the companies responsible for building and operating the PNG network.

Two tranches over six months 

The scheme will be implemented in two tranches spanning six months, with incentives linked to incremental billed domestic PNG connections achieved during the performance period.

This performance-linked approach gives CGD companies a direct reason to focus on actual usage rather than simply installing additional meters or pipelines. The Centre's PNG push comes as India seeks to expand access to cleaner cooking fuels while strengthening the economics of its city gas distribution network.