India launches PNG incentive scheme to accelerate domestic gas connections

The Indian government has implemented a new incentive scheme to accelerate the expansion of domestic piped natural gas (PNG) connections. The Incentive Scheme for Promotion of Domestic PNG Connections, which took effect on September 1, aims to increase the number of active, billed connections and expand networks into new areas.

Under the program, City Gas Distribution (CGD) entities that exceed a fixed threshold of domestic connections in their assigned geographical areas will receive an additional allocation of 200 Standard Cubic Metres (SCM) of domestically produced APM gas for every incremental connection. This allocation is intended to help companies replace more expensive liquefied natural gas (LNG) used in transport segments, thereby reducing overall sourcing costs.

By improving the commercial viability of these connections, the government expects the payback period for capital expenditure on household connections to drop from approximately 10 years to nearly three years. As of August 18, India had approximately 1.74 crore domestic PNG connections, with networks being developed across 309 geographical areas authorized by the Petroleum and Natural Gas Regulatory Board (PNGRB).