New Incentive Scheme Aims to Speed Up Piped Gas Connections Across India

The Union government has launched the Incentive Scheme for Promotion of Domestic PNG Connections, aimed at accelerating the rollout of piped natural gas to households across the country. The scheme was launched on 18 August 2026 and came into effect from 1 September 2026.

Piped natural gas expansion forms part of India's broader push towards cleaner household energy and energy security. Supply to homes is delivered through the City Gas Distribution network, which comprises pipelines and allied facilities serving households, commercial establishments and industrial units. These networks are developed by entities authorised by the Petroleum and Natural Gas Regulatory Board, which has so far authorised operators in 309 Geographical Areas covering the entire mainland. As of 18 August 2026, the country had 1.74 crore domestic PNG connections.

How the scheme works

The scheme seeks to accelerate the growth of active domestic PNG connections and give households access to clean, safe and affordable cooking gas through piped supply. It provides incentives to CGD entities for converting unbilled connections into active, billed ones, and for extending the network into new areas. It will run in two tranches over six months.

A minimum connection threshold has been fixed for each Geographical Area. During the performance period, eligible entities must add billed domestic connections beyond this baseline. For every incremental connection, the entity earns an additional allocation of 200 Standard Cubic Metres of domestically produced Administered Price Mechanism gas, which is priced lower than alternative supplies.

This additional allocation replaces costlier Liquefied Natural Gas that CGD entities currently purchase for their Compressed Natural Gas (transport) segment. Substituting it with cheaper APM gas lowers their overall gas sourcing cost. The payback period on capital spent on a domestic connection is expected to shrink from about ten years to nearly three years, giving companies a stronger commercial incentive to connect homes faster.

Benefits for households

Piped gas offers several advantages over conventional cylinder supply. Gas travels through underground pipelines at low pressure, so cylinders need not be stored or handled, and being lighter than air it disperses quickly in the rare event of a leak. Supply is continuous, with no booking, storage or cylinder changes required, and billing is based on metered use. On a per-unit energy basis, PNG usually costs less than LPG, helping bring down monthly fuel expenses. It also burns cleaner, producing fewer pollutants and lowering indoor air pollution and carbon emissions. High-rise buildings and dense urban colonies stand to benefit most from continuous pipeline supply.

Supporting measures

Several other steps are being taken to support PNG expansion. An Accelerated Approval Framework has been issued under the Natural Gas and Petroleum Products Distribution (Through Laying, Building, Operation and Expansion of Pipelines and Other Facilities) Order, 2026, which also introduces uniform charges for pipeline Right-of-Way. Applications are to be processed on priority within defined timelines. States are being encouraged to reduce Value Added Tax on natural gas to 5 percent, and several have already done so. A National PNG Drive 2.0 was held from 1 January to 30 June 2026 to accelerate domestic connections across Geographical Areas, and a unified single-window registration portal is being developed to make applying for and tracking new connections simpler and quicker.