New Delhi, August 19, 2026: The Central government has approved a new Incentive Scheme for Promotion of Domestic PNG Connections aimed at accelerating the expansion of piped natural gas (PNG) connections among households across the country.
The scheme, approved by the government on August 18, will come into effect from September 1, 2026, and is designed to encourage City Gas Distribution (CGD) entities to expand their household PNG networks and convert unbilled or inactive connections into active, billed connections.
Under the initiative, eligible CGD entities will receive an additional allocation of domestic APM gas for incremental billed domestic PNG connections. The incentive is intended to reduce gas sourcing costs for distributors and improve the financial viability of expanding household PNG infrastructure.
The scheme will be implemented in two six-month tranches. The additional domestic gas allocation is expected to help CGD companies reduce their dependence on relatively more expensive LNG for their overall gas requirements, thereby improving the economics of domestic PNG expansion.
According to the government, the financial benefit could significantly shorten the investment payback period for domestic PNG connections. Investments that currently take around 10 years to recover could see the payback period reduced to nearly three years, creating a stronger incentive for CGD companies to expand their networks.
The initiative is expected to support the government’s broader objective of increasing access to clean, safe and affordable cooking fuel. PNG offers households a continuous piped fuel supply and can reduce dependence on conventional LPG cylinders.
The scheme is also expected to encourage CGD companies to extend networks into new areas where household PNG penetration remains limited. By improving the commercial viability of new connections, the government hopes to accelerate the rollout of piped gas infrastructure and bring more households into the country’s expanding city gas distribution network.
The move comes as India continues to expand the use of natural gas as part of its efforts to diversify the energy mix and promote cleaner fuels. The government expects the incentive mechanism to provide both consumers and gas distribution companies with greater momentum toward wider adoption of domestic PNG.
