New Delhi: The Centre has launched a new incentive scheme to accelerate the expansion of domestic Piped Natural Gas (PNG) connections, with the aim of making piped cooking fuel more accessible to households across India.
The Incentive Scheme for Promotion of Domestic PNG Connections was launched on August 18, 2026, and came into effect on September 1. It will be implemented in two tranches over a six-month period.
How the PNG Incentive Scheme Works
The scheme provides incentives to authorised City Gas Distribution (CGD) entities for increasing active domestic PNG connections and extending networks to new areas.
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Key features include:
- A minimum connection threshold has been fixed for each Geographical Area (GA).
- CGD entities will have to add billed domestic connections beyond the prescribed threshold during the performance period.
- For every incremental eligible connection, an additional allocation of 200 Standard Cubic Metres (SCM) of domestically produced APM gas will be provided.
- The additional APM gas is intended to replace costlier LNG currently sourced by CGD entities for their Compressed Natural Gas (Transport) segment.
According to the government, the lower-cost gas allocation is expected to reduce the cost of sourcing gas for CGD entities and shorten the payback period on capital invested in domestic PNG connections from around 10 years to nearly three years.
1.74 Crore Domestic PNG Connections Already in Place
The City Gas Distribution network covers pipelines and related infrastructure supplying households, commercial establishments and industries.
The Petroleum and Natural Gas Regulatory Board (PNGRB) has authorised CGD entities across 309 Geographical Areas, covering the entire mainland of India.
As of August 18, 2026, the country had 1.74 crore domestic PNG connections.
Government Measures to Expand PNG Access
The government has also outlined several measures aimed at supporting the expansion of domestic PNG infrastructure:
- Accelerated approvals: A new framework provides priority processing and defined timelines for approvals related to pipeline development.
- Uniform RoW charges: The 2026 order introduces uniform Right-of-Way charges for laying PNG pipelines.
- Lower VAT: States have been encouraged to reduce VAT on natural gas to 5%, with several states already adopting the rate.
- National PNG Drive 2.0: A nationwide campaign was conducted from January 1 to June 30, 2026, to accelerate domestic PNG connections.
- Unified registration portal: A single-window digital platform is being developed for applying for and tracking new PNG connections.
PNG as an Alternative to LPG Cylinders
PNG is supplied through underground pipelines and billed according to metered consumption. The government highlights several household advantages, including:
- Continuous supply without cylinder booking or storage.
- Payment based on actual consumption.
- Lower handling requirements compared with LPG cylinders.
- Cleaner combustion with fewer pollutants than conventional cooking fuels.
- Reduced dependence on cylinder-based fuel delivery.
The new incentive mechanism is intended to encourage CGD companies to expand household connections while supporting the government’s broader push for greater use of natural gas in domestic energy consumption.
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