Daijiworld Media Network - New Delhi

New Delhi, Sep 13: The new incentive scheme for domestic piped natural gas (PNG) connections is aimed at accelerating the expansion of clean cooking fuel to households, with the initiative expected to reduce the payback period for companies investing in new connections from around 10 years to nearly three years, the government said on Sunday.

The Incentive Scheme for Promotion of Domestic PNG Connections was launched on August 18, 2026, and came into effect from September 1.

The scheme seeks to increase the number of active domestic PNG connections by encouraging City Gas Distribution (CGD) entities to convert unbilled connections into active, billed connections and extend PNG networks into new areas.

According to the government, India had around 1.74 crore domestic PNG connections as of August 18.

The City Gas Distribution network is being developed by entities authorised by the Petroleum and Natural Gas Regulatory Board (PNGRB), which has authorised entities across 309 Geographical Areas covering the entire mainland of the country.

Under the new scheme, a minimum threshold for domestic connections has been fixed for each Geographical Area.

Eligible CGD entities that add billed domestic connections above the prescribed threshold during the performance period will receive an additional allocation of 200 Standard Cubic Metres (SCM) of domestically produced APM gas for every incremental connection.

The additional APM gas allocation is expected to replace more expensive liquefied natural gas (LNG) currently sourced by CGD entities for their Compressed Natural Gas (Transport) segment.

The substitution of LNG with lower-priced domestic APM gas is expected to reduce the overall cost of gas sourcing for CGD companies.

The government expects the lower sourcing cost to improve the commercial viability of domestic PNG connections. Consequently, the payback period on capital expenditure for a household connection is projected to fall sharply from around 10 years to nearly three years.

The shorter payback period is expected to provide CGD companies with a stronger incentive to expand household coverage and accelerate the rollout of PNG connections.

The scheme will be implemented in two tranches over a period of six months and is designed to align the commercial interests of CGD companies with the broader objective of expanding access to cleaner household energy.