India Launches Incentive Scheme to Expand Domestic PNG Connections

The Government of India approved the Incentive Scheme for Promotion of Domestic PNG Connections to accelerate the expansion of piped natural gas for households. Effective September 1, 2026, the program provides eligible city gas distribution companies with an additional 200 standard cubic meters of lower-priced, domestically produced APM gas for every incremental billed connection achieved above a set threshold.

This allocation allows companies to substitute expensive imported liquefied natural gas used in transport segments, which the government expects will shorten the capital expenditure payback period for domestic connections from approximately 10 years to three years. The initiative aims to lower fuel subsidy costs and reduce dependence on imported liquefied petroleum gas, which accounted for nearly 60% of requirements in 2025, particularly amid shipment disruptions linked to the US-Iran conflict.

Following the announcement, shares of major distributors including Indraprastha Gas, Mahanagar Gas, and Adani Total Gas rose by up to 6%. India currently maintains roughly 1.74 crore domestic PNG connections.