Summary of this article
Govt offers cheaper domestic gas allocation for each new billed PNG connection
Scheme could cut PNG connection investment payback period to around three years
IGL, MGL and Adani Total Gas gain up to 6 per cent
Shares of city gas distributors rose on August 19, 2026, after the government approved an incentive scheme aimed at accelerating the adoption of piped natural gas (PNG) among households. Adani Total Gas climbed 6.27 per cent to Rs 687.90 apiece on the NSE, followed by Indraprastha Gas, which rose 5.55 per cent to Rs 157.68, while Mahanagar Gas gained 5.43 per cent to Rs 1,171.05. The gains came after the Centre announced incentives for city gas distribution (CGD) companies to increase active domestic PNG connections.
The Ministry of Petroleum and Natural Gas said the Incentive Scheme for Promotion of Domestic PNG Connections will take effect from September 1. The scheme will run in two tranches over six months and target both the conversion of existing unbilled connections into active customers along with the addition of new household connections.
Under the scheme, eligible CGD companies will receive an additional 200 standard cubic metres of domestically produced, lower-priced gas for every incremental billed domestic PNG connection achieved during the performance period. The additional allocation will replace costlier liquefied natural gas (LNG) that CGD companies currently source for their CNG transport business, thereby lowering their overall gas procurement costs.
The government said the financial benefit could bring down the payback period for investments in domestic PNG connections to around three years from nearly 10 years. This is expected to give CGD companies greater incentive to expand their household networks and convert existing connections into paying customers.
India has about 17.40 million domestic PNG connections, compared to around 331.40 million active LPG customers as on July 1, 2026. The government is seeking to expand PNG adoption as it looks to reduce the country’s dependence on imported LPG and lower the cost of household cooking fuel.
India meets around 60 per cent of its LPG demand through imports, according to the Ministry of Petroleum and Natural Gas. The ministry said around 90 per cent of these imports pass through the Strait of Hormuz. The government has also introduced other measures to accelerate PNG adoption, including faster approvals for infrastructure and standardised right-of-way charges under the Natural Gas & Petroleum Distribution Order, 2026. States have also been encouraged to reduce value added tax (VAT) on natural gas to 5 per cent, while the Centre has launched National PNG Drive 2.0 to promote household conversions.
The scheme could make domestic PNG expansion more viable for CGD companies by helping them recover the high upfront cost of laying pipelines and providing new connections. The government is also developing a single-window digital portal where consumers can apply for and track PNG connections.
