The Central Government’s new incentive scheme to expand access to domestic Piped Natural Gas (PNG) came into effect on September 1, 2026. Under this scheme, City Gas Distribution (CGD) companies that add domestic PNG connections beyond their set targets will receive an additional allocation of 200 Standard Cubic Meters (SCM) of APM gas for each extra connection.
This scheme, to be implemented over a six-month period, aims to activate dormant domestic connections and accelerate the expansion of the PNG network into new areas. The government expects that the additional allocation of affordable gas will make it more economically attractive for companies to increase domestic connections.
India Records 1.74 Crore Domestic PNG Connections
The Petroleum and Natural Gas Regulatory Board (PNGRB) has authorized CGD entities across 309 geographical areas in the country. These areas cover the entire mainland of the nation. According to the government, India currently has around 1.74 crore domestic PNG connections across the country.
PNG is supplied directly to homes via a pipeline. Consumers do not have to go through the processes of booking, storage, and delivery associated with LPG cylinders. Consumption is recorded via a meter, and payment is made based on the gas actually used.
Continuous supply through a pipeline eliminates the hassle of running out of gas and waiting for cylinder deliveries. PNG is considered a relatively cleaner option compared to many traditional cooking fuels, which can help reduce indoor air pollution and emissions.
200 SCM of APM Gas for Every Additional Connection
Under the scheme, a prescribed threshold for domestic PNG connections has been set for each Geographical Area (GA). Eligible City Gas Distribution (CGD) entities that achieve incremental billed domestic PNG connections above the prescribed threshold during the scheme period will receive an additional allocation of 200 Standard Cubic Metres (SCM) of APM gas for every such incremental connection.
The additional allocation of APM gas will help CGD entities reduce their dependence on costlier Liquefied Natural Gas (LNG), which they currently procure for the Compressed Natural Gas (Transport) segment. Replacing a portion of this LNG with lower-cost APM gas is expected to reduce their overall gas sourcing costs.
According to government estimates, this incentive could reduce the payback period for investments made in domestic PNG networks from approximately 10 years to around three years. This will provide companies with a strong business incentive to extend pipeline networks to more households.
Government Takes Key Steps to Expand PNG Network
In addition to incentive schemes, the government has undertaken several initiatives at both regulatory and digital levels to expand the domestic PNG network. Provisions have been made to expedite the approval process for pipeline projects under the ‘Natural Gas and Petroleum Product Distribution (through laying, building, operating, and expanding pipelines and other facilities) Order, 2026’.
A uniform fee structure has also been implemented for the use of land or public spaces regarding the Right of Way (RoW) for laying PNG pipelines. Provisions have been made to process applications on a priority basis within a stipulated timeframe.
States are also being encouraged to reduce VAT to 5 percent to lower the cost of natural gas. Several states have already taken steps in this direction. Additionally, the ‘National PNG Campaign 2.0’ was conducted from January 1 to June 30, 2026, with the aim of accelerating the rollout of domestic PNG connections.
An integrated PNG registration portal is also being developed to make it easier for consumers to apply for new connections and track their application status. The broader objective of these government initiatives and the new incentive scheme is to connect more households with clean, convenient, and reliable pipeline-based cooking fuel.
(PIB)
