Govt approves incentive scheme to boost domestic PNG connections

The government on Tuesday approved an incentive scheme to accelerate the rollout of domestic piped natural gas (PNG) connections, seeking to expand access to cleaner and more affordable cooking fuel across India.

The Incentive Scheme for Promotion of Domestic PNG Connections aims to encourage city gas distribution (CGD) companies to convert unbilled connections into active gas connections and expand PNG networks to new areas.

There are currently around 1.74 crore domestic PNG connections across the country.

Under the scheme, 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 threshold level fixed for the respective geographical area.

The scheme will be implemented in two tranches over a period of six months.

The additional APM gas allocation will substitute costlier liquefied natural gas (LNG) currently procured by CGD entities for their compressed natural gas (CNG) transport segment, reducing their overall gas procurement costs.

According to the government, the resulting savings could bring down the payback period on capital expenditure for domestic PNG connections from around 10 years to about three years.

"This will give CGD entities a strong financial incentive to expand household PNG connectivity more rapidly," the government said.

PNG is being promoted as a cleaner and more convenient alternative to LPG cylinders and traditional cooking fuels.

PNG also eliminates the need to book, store and replace cylinders and provides uninterrupted supply through pipelines.

In recent months, the government has introduced measures including an accelerated approval framework and standardised right-of-way charges for PNG infrastructure under the Natural Gas & Petroleum Distribution Order, 2026.

States are also being encouraged to rationalise value added tax (VAT) on natural gas to 5% to make PNG more affordable.

Several states have already reduced VAT on natural gas, the government said.

The government has also launched the National PNG Drive 2.0, which includes a portal for surrender of LPG cylinders, household notices, awareness camps and efforts to facilitate conversion of LPG-using housing societies to PNG.

A unified digital portal for registration of new PNG connections is also under development to provide a single-window platform for applying for and tracking connections.