The Indian government has introduced incentives for city gas distribution companies to increase domestic piped natural gas (PNG) connections across cities. The move aims to reduce dependence on imported liquefied petroleum gas (LPG) and encourage more households to shift to piped cooking gas.
The announcement comes at a time when global fuel shipments have been affected due to the ongoing US-Iran conflict, leading to higher import costs. India, one of the world’s largest LPG importers, is now looking to strengthen its domestic gas distribution network and reduce pressure on imports and subsidies.
Under the new incentive scheme, city gas distributors will receive an additional 200 standard cubic metres of cheaper, domestically produced gas for every household that gets a new PNG connection and starts using and paying for the service.
The Ministry of Petroleum and Natural Gas said the scheme will encourage companies to activate unused pipeline connections and expand networks to reach more households. The additional domestic gas allocation is expected to reduce sourcing costs for distributors and help them recover investments in new connections faster.
According to the government, the incentive could help companies recover their investment in new PNG connections in around three years, compared with the current estimated period of nearly 10 years.
Since the start of the fuel crisis, several gas distributors, including Indraprastha Gas, Mahanagar Gas, GAIL Gas and Bharat Petroleum Corporation, have introduced measures such as reducing installation charges to encourage more households to adopt piped gas connections.
India currently has around 17.4 million domestic PNG connections, while the number of active LPG consumers stands at around 331.4 million. The country imports nearly 60% of its LPG requirements, with most supplies coming from the Middle East.
In 2025, India imported around 22 million metric tonnes of LPG and spent nearly $12 billion on imports. The government’s latest move is aimed at creating a stronger domestic gas network while reducing the country’s reliance on imported cooking fuel.
The incentive scheme will come into effect from September and is expected to support city gas distributors in expanding PNG access and encouraging more households to move towards a cleaner and more reliable cooking fuel option.
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