Industry Odisha Bureau, Aug 19: The government is introducing a new incentive scheme to encourage city gas distributors to connect more households to piped natural gas (PNG). This comes as disruptions in the Middle East put pressure on India’s LPG supplies and import costs.
Starting in September, gas distribution companies will receive an additional 200 standard cubic metres of cheaper domestic gas for every household that gets a new PNG connection and starts using and paying for the service. The government expects this additional allocation to reduce the companies’ gas procurement costs and make new connections more financially viable.
Notably, the scheme will also encourage distributors to activate existing PNG connections that are currently unused. They will further expand their networks to reach more homes. According to the Ministry of Petroleum and Natural Gas, the incentives could help companies recover the cost of installing new connections in about three years.
This move comes as India remains heavily dependent on imported LPG. The country is the world’s second largest LPG importer and relies on overseas supplies for around 60 percent of its requirements. India imported about 22 million metric tonnes of LPG in the year 2025, spending nearly $12 billion. Most of the supplies came from the Middle East.
Currently, India has around 17.4 million domestic PNG connections. This is far fewer than its 331.4 million active household LPG customers as of July 1. The government sees this gap as an opportunity to expand the piped gas network.
Gas companies have already been offering incentives to attract customers. Indraprastha Gas, Mahanagar Gas, GAIL Gas, and Bharat Petroleum have introduced measures such as reduced installation charges for new connections.
