India Turns to Piped Gas Amid LPG Supply Crunch

India's government has introduced an incentive scheme to promote the use of piped natural gas (PNG) in households, aiming to reduce reliance on imported liquefied petroleum gas (LPG). The Middle East conflict has disrupted supply from Persian Gulf producers, forcing India to source LPG from other suppliers at higher costs.

The Incentive Scheme for Promotion of Domestic PNG Connections will come into effect on September 1, 2026. Eligible city gas distributors will receive an additional 200 standard cubic meters of domestically-produced, lower-priced gas for every incremental domestic PNG connection.

This allocation will substitute the costlier Liquefied Natural Gas (LNG) that CGD entities currently procure for their Compressed Natural Gas (Transport) segment, thereby lowering their overall gas-sourcing costs. The government hopes to expand the PNG network to new areas and convert unbilled connections into working gas connections.