The Ministry of Petroleum and Natural Gas launched the Incentive Scheme for Promotion of Domestic PNG Connections on August 18, 2026, which came into effect from September 1, 2026. The scheme aims to accelerate the growth of active domestic PNG connections by providing incentives to City Gas Distribution (CGD) entities authorized by PNGRB for converting unbilled connections into active, billed connections and expanding the PNG network into new areas.
Under the scheme, CGD entities must add billed domestic connections beyond a minimum threshold fixed for each of the 309 Geographical Areas (GAs) across mainland India. For each incremental connection beyond this threshold, entities earn an additional allocation of 200 Standard Cubic Metres (SCM) of domestically produced Administered Price Mechanism (APM) gas, which is priced lower than Liquefied Natural Gas (LNG). This additional APM gas allocation replaces costlier LNG that CGD entities currently purchase for their Compressed Natural Gas (Transport) segment, thereby reducing their overall gas sourcing costs.
The scheme is expected to significantly reduce the payback period on capital spent for domestic connections from approximately ten years to nearly three years, providing strong commercial motivation for faster household connections. As of August 18, 2026, there were 1.74 crore domestic PNG connections across the country, and the scheme will run in two tranches spread over six months to further expand coverage.
Supporting initiatives for PNG expansion include streamlined regulatory approvals through an Accelerated Approval Framework under the Natural Gas and Petroleum Products Distribution Order, 2026, which introduces uniform charges for pipeline Right-of-Way (RoW) and priority processing within defined timelines. States are being encouraged to reduce Value Added Tax (VAT) on natural gas to 5%, with several states having already implemented this reduction. Additional measures include the National PNG Drive 2.0 held from January 1 to June 30, 2026, and the development of a unified PNG registration portal as a single-window digital platform for connection applications and tracking.
The scheme aligns commercial interests of gas companies with national goals of providing clean, safe, and affordable cooking gas through piped supply, offering households benefits including safety, convenience, lower costs, cleaner environment, and assured supply without cylinder handling requirements.