New Delhi: The government approved an incentive scheme on Tuesday for promotion of domestic Piped Natural Gas (PNG) connections, the Ministry of Petroleum and Natural Gas said. The scheme takes effect from September 1. The ministry said there are currently 1.74 crore domestic PNG connections in the country. The scheme is intended to push City Gas Distribution (CGD) companies to convert unbilled connections into working gas connections, and to extend the PNG network into new areas.
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Eligible CGD entities will be allocated an additional 200 SCM of domestically-produced, lower-priced APM gas for every incremental billed domestic PNG connection achieved during the performance period. The allocation applies to connections above a Threshold Level set for each Geographical Area (GA).
The scheme will run in two tranches across six months.
The additional gas will substitute the costlier Liquefied Natural Gas (LNG) that CGD entities currently buy for their Compressed Natural Gas (transport) segment. The ministry said this will lower their overall gas-sourcing costs.
According to the ministry, the resulting savings are expected to cut the payback period on capital expenditure for domestic PNG connections from around 10 years to approximately three years.
The ministry listed a set of earlier steps, it said, the scheme builds on. An Accelerated Approval Framework and standardised Right-of-Way charges have been issued under the Natural Gas & Petroleum Distribution Order, 2026. The ministry said these are meant to secure priority disposal of applications for PNG infrastructure within defined timelines.
States are being encouraged to reduce VAT on natural gas to 5 percent. The ministry said several states have already cut the rate.
A National PNG Drive 2.0 covers a portal for surrender of LPG cylinders, household notices, awareness camps, and conversion of LPG-using housing societies to PNG. A unified single-window PNG registration portal is under development for applying for and tracking new connections.
The ministry set out what it described as the advantages of piped gas for households. It said PNG is supplied through underground pipelines at low pressure, which removes the risks of storing and handling cylinders, and that being lighter than air it disperses quickly in the event of a leak.
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It said billing is based on metered consumption, that households pay only for what they use, and that PNG is generally cheaper than LPG on a per-unit energy basis. It also said PNG burns cleaner than conventional cooking fuels, and that continuous pipeline supply removes dependence on cylinder delivery, which it said particularly benefits households in high-rise buildings and dense urban colonies.