Incentive Scheme to Expand Domestic PNG Connections

Why in the News ?

The Government has approved an incentive scheme to accelerate domestic PNG connections from September 1, 2026. It will encourage CGD companies to activate unbilled connections and expand networks, while offering additional domestic gas allocation to support cleaner household cooking fuel access.

Government Initiative for PNG Expansion:

●     The Government has approved an Incentive Scheme for Promotion of Domestic PNG Connections to accelerate the adoption of piped natural gas across India.

●     The scheme aims to provide households with clean, safe, affordable and convenient cooking fuel.

●     It will come into effect from 1 September and focus on rapidly increasing active domestic PNG connections.

●     The Ministry of Petroleum and Natural Gas stated that the initiative will help more households access piped cooking gas at the earliest.

●     India currently has around 1.74 crore domestic PNG connections.

●     The scheme seeks to strengthen the expansion of the City Gas Distribution (CGD) network and improve household access to PNG.

Incentives for City Gas Distribution Companies

●     The scheme directly incentivises City Gas Distribution companies to increase the number of functional PNG connections.

●     CGD companies will be encouraged to convert unbilled or inactive connections into active, billed connections.

●     They will also be encouraged to expand PNG infrastructure into new geographical areas.

●     Under the scheme, eligible CGD entities will receive an additional allocation of 200 Standard Cubic Metres (SCM) of domestically produced gas for every incremental billed domestic PNG connection achieved during the performance period.

●     The additional gas will be available at a lower price, helping CGD companies reduce their overall gas procurement expenses.

●     The initiative therefore combines consumer-level clean-energy access with economic incentives for gas distributors.

 Key Implementation and Expected Benefits:

●     The scheme will be implemented in two tranches over a period of six months.

●     The additional domestic gas allocation will substitute for relatively expensive Liquefied Natural Gas (LNG) currently procured by CGD entities for their Compressed Natural Gas (CNG) transport segment.

●     This substitution is expected to reduce the overall gas-sourcing costs of eligible CGD companies.

●     Lower procurement costs and financial incentives are expected to encourage companies to expand domestic PNG infrastructure.

●     PNG provides households with a cleaner and safer alternative to conventional cooking fuels and LPG cylinders.

●     Greater PNG penetration can improve energy convenience, urban fuel infrastructure and access to cleaner cooking energy.

●     The scheme also supports India’s broader objective of expanding the natural gas-based energy ecosystem and increasing the share of gas in the country’s energy mix.