Govt incentive boosts city gas stocks as domestic PNG connection drive ramps up

Mumbai: The government’s incentive scheme to expand domestic piped natural gas connections will begin on September 1, 2026. The plan aims to activate existing connections and take PNG services to more households.India currently has around 1.74 crore domestic PNG connections, according to data.How the scheme will work?City gas distribution companies will receive incentives for converting unbilled PNG connections into active connections that generate bills. They will also be encouraged to extend pipeline networks into new areas.Eligible companies will receive an extra allocation of 200 standard cubic metres of lower-priced, domestically produced APM gas for every additional billed domestic PNG connection above the threshold fixed for each area.The six-month programme will be implemented in two tranches.Lower costs for companiesThe additional APM gas will replace part of the expensive liquefied natural gas purchased by CGD companies for their compressed natural gas transport business.This could lower gas-sourcing costs and make investment in domestic PNG infrastructure more attractive. PNG Connection Expansion Campaign Gathers Pace In Uttar Pradesh, Over 1.60 Lakh Connections Issued Till June 24The government expects these savings to reduce the payback period for spending on household PNG connections from nearly 10 years to about three years. This could encourage companies to add connections faster.Benefits for householdsPNG gives households a continuous, metered supply of cooking gas through pipelines. Users do not need to book, store or replace LPG cylinders and pay according to consumption.The government said PNG offers convenience and safety benefits because gas is supplied through pipelines at low pressure and cylinders need not be stored inside homes.Wider push for PNGThe scheme supports measures such as simpler infrastructure approvals, standardised Right-of-Way charges and efforts to persuade states to reduce value-added tax on natural gas to 5 percent.Under National PNG Drive 2.0, authorities are conducting awareness campaigns, offering LPG cylinder surrender facilities and encouraging housing societies to shift to PNG.A unified digital portal for applying for new PNG connections and tracking applications is also being developed.

Shares of city gas distributors jumped by up to 6% on Wednesday after the government approved an incentive scheme to promote domestic PNG connections, which it called a major initiative to bring clean, safe and affordable piped cooking gas to households across the country.Mahanagar Gas (MGL) shares jumped nearly 6% to trade at Rs 1,173 apiece on Wednesday morning, while those of Indraprastha Gas (IGL) and Adani Total Gas jumped over 5% each despite an overall muted market sentiment.New scheme for promotion of domestic PNG connectionsThe Ministry of Petroleum & Natural Gas on Tuesday announced that the scheme, which will take effect from September 1 onwards, is designed to fast-track the expansion of active PNG connections ensuring that more families can start using piped natural gas in their kitchens at the earliest.Under the scheme, the eligible city gas distribution (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 period, over and above the threshold Level determined for the respective geographical area.The new scheme will be implemented over two trachea spanning six months, and the additional gas allocation will substitute the costlier LNG that CGD entities currently procure for their CNG segment, thereby lowering their overall gas-sourcing costs, the government said in its press release.Also read | Government offers cheaper domestic gas to city gas distributors to boost PNG connectionsHow will city gas distributors benefit?The Ministry added that the subsequent cost savings are expected to shorten the payback period for capital expenditure incurred on D-PNG connections from around 10 years to approximately 3 years, which in turn would give CGD entities a strong financial incentive to expand household PNG connectivity more rapidly, bringing the benefits of clean, safe and affordable piped cooking gas to a larger number of Indian households in the months ahead.At present, there are 1.74 crore domestic PNG connections across the country, according to the government, which said that the new scheme directly incentivises the city gas distribution (CGD) companies to actively convert unbilled connections into working gas connections, and expand the PNG network to new areas.In its press release, the government highlighted that PNG offers households a safer, cleaner and more convenient alternative to LPG cylinders and traditional cooking fuels. “This Scheme builds on a series of steps the Government has taken over the past few months to accelerate PNG expansion and make the transition to clean cooking fuel easier for households,” it added.Also read | Mahanagar Gas eyes 1 million new PNG connections in FY27, capex raised(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Shares of city gas distribution companies gained on August 19 after the government announced incentives aimed at accelerating the adoption of piped natural gas (PNG) among households. Indraprastha Gas, Mahanagar Gas and Adani Total Gas rose as much as 3.5%, 3.3% and 2.2%, respectively.The initiative comes as disruptions to fuel shipments linked to the US-Iran conflict have increased concerns over India's dependence on imported cooking fuels. The government is seeking to strengthen domestic PNG adoption to reduce reliance on imported LPG and lower the financial burden associated with fuel subsidies.MGL Partners With India Post For Doorstep PNG Meter Reading Services, Pilot Begins In South MumbaiPNG Connection Expansion Campaign Gathers Pace In Uttar Pradesh, Over 1.60 Lakh Connections Issued Till June 24 Centre offers gas incentives to boost PNG connectionsUnder the new scheme, which will take effect from September, city gas distribution companies will receive an additional 200 standard cubic metres of lower-cost domestic natural gas for every household that is connected to their network and begins using and paying for PNG.The incentive is expected to encourage distributors to convert existing but inactive connections into paying customers while also expanding pipelines to households that are not yet connected.According to the government, the cheaper gas could significantly improve the economics of new connections. The payback period for investments in domestic PNG infrastructure could fall to around three years from nearly a decade. India seeks to reduce LPG import dependenceIndia currently has around 17.4 million domestic PNG connections, compared with approximately 331.4 million active household LPG customers as of July 1. The country imports nearly 60% of its LPG requirements, with imports reaching about 22 million tonnes in 2025 at a cost of nearly $12 billion.Gas companies including IGL, MGL, GAIL Gas and Bharat Petroleum have already introduced measures such as reduced installation charges to encourage households to switch to PNG.The government has also introduced measures to strengthen PNG infrastructure, including faster approvals and standardised right-of-way charges. States have been encouraged to reduce VAT on natural gas to 5% to make PNG more affordable.