Govt Introduces Incentives to Boost PNG Connections Across the Country

The government is introducing a new incentive scheme to encourage city gas distribution companies to expand piped natural gas (PNG) connections among households.

As disruptions linked to the US-Iran conflict put pressure on fuel supplies and raise import costs, Reuters reported. The initiative is aimed at encouraging more households to shift from LPG cylinders to piped gas. A wider PNG network could also help India reduce its dependence on imported LPG and potentially lower the government’s subsidy burden.

What Is The New PNG Incentive?

The scheme is set to take effect in September. Under the new arrangement, city gas distributors will receive an additional 200 standard cubic metres of cheaper domestic gas for every household that is newly connected to PNG and begins using and paying for the service.

The additional allocation is expected to reduce the cost of gas procurement for distributors and improve the economics of expanding household connections.

The scheme will also encourage companies to activate existing PNG connections that are currently not being used, while expanding their networks to bring piped gas to more households.

According to the Ministry of Petroleum and Natural Gas, the incentive could allow distributors to recover the cost of installing new connections in around three years. At present, companies can take roughly 10 years to recover such investments.

India Remains Heavily Dependent On LPG Imports

The move comes as India faces increased pressure on its LPG supply chain. India is the world’s second-largest LPG importer and relies on overseas markets for around 60% of its LPG requirements.

A significant share of India’s LPG imports comes from the Middle East, making supplies vulnerable to disruptions arising from the ongoing regional conflict.

India imported around 22 million metric tonnes of LPG in 2025, spending close to $12 billion. Most of the imports came from Middle Eastern suppliers.

The government is now looking to use the supply pressure as an opportunity to accelerate the expansion of PNG infrastructure and reduce reliance on imported cooking gas.

India currently has around 17.4 million domestic PNG connections. That number is significantly lower than the country’s LPG customer base, which stood at around 331.4 million active household connections as of July 1.

The gap highlights the considerable potential for city gas distributors to increase PNG adoption.

PNG Companies Already Offering Benefits

City gas distributors have already introduced measures to attract more households to piped gas since the conflict began.

Companies including Indraprastha Gas, Mahanagar Gas, GAIL Gas and Bharat Petroleum have offered incentives such as reduced installation charges for new PNG connections.

The government’s latest scheme is expected to strengthen these efforts by improving the financial viability of new connections. It could also encourage distributors to convert inactive PNG connections into active, paying customers.

For households, PNG offers a continuous supply of cooking gas through a pipeline, eliminating the need to regularly order, receive and replace LPG cylinders.