Government Offers Cheaper Gas to Boost PNG Connections

The Indian government has launched an initiative to boost the number of households connected to piped natural gas (PNG) by offering city gas distributors cheaper domestic gas. The scheme, which takes effect on September 1, will provide additional 200 standard cubic meters of domestically-produced gas to eligible distributors for every incremental billed PNG connection achieved.

The goal is to expand PNG customers and reduce the burden on imported liquefied natural gas (LNG). Currently, only 63% of households with installed PNG meters are billed connections, leaving a significant gap in last-mile connectivity. The ministry estimates that the consequent cost savings will shorten the payback period for capital expenditure incurred on domestic PNG connections from around 10 years to about 3 years.

The scheme will be implemented over two tranches spanning six months and will benefit city gas distributors who achieve incremental billed PNG connections above a threshold level determined for each geographical area. Industry executives have welcomed the move, with Mahanagar Gas aiming to add 1 million new PNG connections in FY27.