India’s new PNG incentive scheme from Sept 1: How will households benefit

The scheme will incentivise city gas distribution (CGD) companies to convert unbilled domestic PNG connections into active, billed connections and expand the PNG network to new areas.

India currently has around 1.74 crore domestic PNG connections, according to the government.

Under the scheme, eligible CGD entities will receive an additional allocation of 200 standard cubic metres (SCM) of domestically produced, lower-priced APM gas for every incremental billed domestic PNG connection achieved above a specified threshold for the respective geographical area.

The scheme will run in two tranches over a period of six months.

The additional APM gas allocation will replace some of the costlier liquefied natural gas (LNG) that CGD companies currently procure for their compressed natural gas (CNG) transport operations. This is expected to lower their overall gas-sourcing costs.

According to the government, the resulting savings could reduce the payback period for capital expenditure on domestic PNG connections from around 10 years to about three years. This is expected to encourage CGD companies to expand household PNG connections at a faster pace.

What the scheme means for households

PNG provides households with a piped supply of cooking gas, eliminating the need to book, store and replace LPG cylinders. Consumers are billed based on their metered consumption.

The government said PNG can also offer safety and convenience benefits because it is supplied through pipelines at low pressure and does not require households to store cylinders.

The scheme is part of the government’s broader efforts to expand the use of PNG as a cooking fuel. These include streamlined regulatory approvals for PNG infrastructure, standardised Right-of-Way charges and efforts to encourage states to reduce VAT on natural gas to 5%.

The government has also launched the National PNG Drive 2.0, which includes measures such as household awareness campaigns, LPG cylinder surrender facilities and efforts to convert housing societies from LPG to PNG.

A unified digital portal for applying for and tracking new PNG connections is also under development.