Govt rolls out incentives to expand PNG connections

The government is offering incentives to city gas distributors to increase the number of households using piped natural gas (PNG), as the US-Iran conflict disrupts fuel supplies and pushes up import costs, reported Reuters.The move is aimed at encouraging more households to move from LPG cylinders to piped gas. It could also help India reduce its dependence on imported LPG and lower the cost of subsidies.WHAT IS THE NEW INCENTIVE?The new incentive scheme will come into effect in September. Under the scheme, city gas distribution companies will get an additional 200 standard cubic metres of cheaper domestic gas for every household that they connect and that starts using and paying for PNG.The government expects the additional gas allocation to bring down the overall cost of sourcing gas for these companies. The scheme will also encourage distributors to make use of existing PNG connections that are currently inactive and expand their networks to reach more households.The Ministry of Petroleum and Natural Gas said the incentive could help companies recover their investment in new connections in around three years, compared with about 10 years currently. It must be mentioned that India is the world's second-largest LPG importer and depends on overseas supplies for around 60% of its LPG needs.A large part of India's LPG imports comes from the Middle East. The ongoing conflict in the region has disrupted fuel shipments and increased concerns over supply and costs.India imported around 22 million metric tonnes of LPG in 2025, spending nearly $12 billion. Most of these imports came from the Middle East.The government is now looking to use the current supply pressure to speed up the expansion of piped gas connections.India currently has around 17.4 million domestic PNG connections, according to the government.In comparison, the country had around 331.4 million active household LPG customers as of July 1. The large difference highlights the huge potential for city gas companies to add more PNG customers.For households, PNG provides cooking gas directly through a pipeline, removing the need to order and replace LPG cylinders.GAS COMPANIES OFFER INCENTIVESCity gas distributors have already started offering benefits to attract more PNG customers since the conflict began.Companies such as Indraprastha Gas, Mahanagar Gas, GAIL Gas and Bharat Petroleum have offered measures including lower installation charges for new piped gas connections.The government's new scheme is expected to give distributors another reason to expand their networks and turn unused connections into active, paying customers.- EndsPublished By: Jasmine anandPublished On: Aug 19, 2026 10:36 IST