City gas companies say government's 100k PNG connections-a-day target unviable

New Delhi: The government has directed city gas distributors to raise the pace of household piped natural gas (PNG) connections to about 100,000 a day from around 9,000 currently, setting annual customer addition targets equivalent to 8-9 times each company's existing active household customer base, according to people familiar with the matter.

Companies describe the targets as unrealistic, citing limited capacity to build infrastructure at such a pace, reluctance to commit fresh capital before earning returns on existing investments, and weak consumer demand as many households remain unwilling to switch from LPG, multiple industry executives told ET.

After the Iran war disrupted LPG supplies, the government pushed city gas distributors to accelerate household PNG connections, as the fuel is domestically produced and less vulnerable to import disruptions. It also eased regulatory norms for laying PNG infrastructure, helping nearly double the pace of new household connections to about 9,000 a day.


The government, however, wants the pace to rise to about 100,000 connections a day. The Petroleum and Natural Gas Regulatory Board has accordingly assigned customer addition targets to each city gas distributor. The targets for the current fiscal year are equivalent to about 8-9 times each company's existing active household customer base, and even higher for some firms, executives said.

"It's so unrealistic that we aren't even looking at it," said one city gas executive. "If you set such targets, all I would do is look for excuses and defences to explain why they couldn't be met."

Executives also pointed to execution bottlenecks. "We work with small contractors who have limited manpower. Laying pipelines in congested cities is difficult and time-consuming," one executive said. Another executive estimated that connecting 100,000 households requires an investment of about ₹250 crore, adding that companies are unwilling to commit more capital until they see some return. In many places, their existing pipeline network remains underutilised.

India has about 17 million household PNG connections, but only around 11 million are active. The remaining households have meters installed but do not have gas flowing for various reasons. People familiar with the government's thinking said the new targets are based on the minimum work programme commitments companies made while bidding for city gas licences in recent rounds.