India Cuts Payback Period on Domestic PNG Connections to Three Years

The Indian government has launched an incentive scheme to boost domestic piped natural gas (PNG) connections across households. The initiative aims to reduce the payback period for companies investing in new connections from around 10 years to nearly three years.

The Incentive Scheme for Promotion of Domestic PNG Connections was introduced on August 18, 2026, and came into effect from September 1. It seeks to increase the number of active domestic PNG connections by incentivizing City Gas Distribution (CGD) entities to convert unbilled connections into active, billed connections.

The scheme fixes a minimum threshold of domestic connections for every Geographical Area. Eligible CGD entities that add billed domestic connections above the prescribed threshold during the performance period will receive an additional allocation of 200 Standard Cubic Metres (SCM) of domestically produced APM gas for every incremental connection.

The additional APM gas allocation is expected to replace more expensive liquefied natural gas (LNG) currently sourced by CGD entities for their Compressed Natural Gas (Transport) segment. The substitution of LNG with lower-priced domestic APM gas is expected to reduce the overall cost of gas sourcing for CGD companies.