Government offers cheaper domestic gas to city gas distributors to boost PNG connections

New Delhi: The government will offer cheaper additional domestic gas to city gas distributors to incentivise them to convert households with installed but inactive piped natural gas (PNG) meters into working connections.

The scheme, effective from 1 September, was approved on Tuesday, the oil ministry said in a statement on Tuesday. India aims to expand PNG customers so that the burden on largely imported LPG can be reduced.

At the end of March, India had 1.69 crore households ‘connected’ to piped natural gas, but only 1.07 crore, or 63%, were billed connections, according to data published by the Petroleum and Natural Gas Regulatory Board. Industry executives said most unbilled households had meters installed but no gas flowing, primarily due to last-mile connectivity gaps.


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“Under the Scheme, eligible CGD entities will be allocated an additional 200 standard cubic meter of domestically-produced, lower-priced (APM) gas for every incremental billed domestic PNG connection achieved during the performance period, over and above the threshold level determined for the respective geographical area (GA),” the ministry said.

The scheme will be implemented over two tranches spanning six months. “The additional gas allocation will substitute the costlier Liquefied Natural Gas (LNG) that CGD entities currently procure for their compressed natural gas (Transport) segment, thereby lowering their overall gas-sourcing costs,” the ministry said.

The consequent cost savings would shorten the payback period for capital expenditure incurred on domestic PNG connections from around 10 years to about 3 years, the ministry said.