"Government Launches Incentive Scheme to Accelerate Domestic PNG Connections"
Piped Natural Gas (PNG)
Natural gas delivered to homes through underground pipelines, metered continuously, replacing cylinder-based LPG.
City Gas Distribution (CGD)
Network of pipelines and facilities supplying gas to households, commercial, and industrial users in a licensed Geographical Area.
India's household energy transition has moved through two broad phases. The first phase shifted millions of households from solid biomass fuels to Liquefied Petroleum Gas (LPG), accelerated by the Pradhan Mantri Ujjwala Yojana. LPG, however, carries structural vulnerabilities. India imports a significant share of its LPG requirement, and supply chains pass through the Strait of Hormuz, exposing them to geopolitical risk. Physical cylinder logistics also create storage hazards and price volatility tied to global crude markets.
The second phase aims to move households further up the energy ladder to Piped Natural Gas (PNG). PNG is delivered through underground city-level pipeline networks, metered continuously, and is generally cheaper per unit of energy than LPG. The regulatory framework for PNG is governed by the Petroleum and Natural Gas Regulatory Board (PNGRB), established under the PNGRB Act, 2006. PNGRB awards Geographical Area (GA) licences to City Gas Distribution (CGD) entities and mandates rollout timelines. One of PNGRB's core mandates is to ensure competitive markets for gas. Appeals against PNGRB decisions go to the Appellate Tribunal for Electricity (APTEL), not a separate energy tribunal, which is an important institutional detail. PNGRB has now authorised CGD entities across 309 Geographical Areas, covering the entire mainland of India. Despite this wide licensing coverage, the gap between licensed GAs and active billed household connections has remained large.
The Incentive Scheme for Promotion of Domestic PNG Connections was launched on 18 August 2026 and came into effect from 1 September 2026. Its core mechanism is straightforward: it rewards CGD entities commercially for doing what they are already licensed to do, connect more homes.
The scheme works through an APM gas allocation incentive. Under the Administered Price Mechanism (APM), domestically produced natural gas is priced below market rates. CGD entities currently buy costlier Liquefied Natural Gas (LNG) for their Compressed Natural Gas (CNG) transport segment. Under the new scheme, for every incremental billed domestic connection added beyond a minimum threshold fixed for each GA, the CGD entity earns an additional allocation of 200 Standard Cubic Metres (SCM) of APM gas. This cheaper APM gas replaces the costlier LNG in the entity's sourcing mix, reducing overall gas procurement costs. …
Consider the following statements:
1.Petroleum and Natural Gas Regulatory Board (PNGRB) is the first regulatory body set up by the Government of India.
2.One of the tasks of PNGRB is to ensure competitive markets for gas.
3.Appeals against the decisions of PNGRB are made before the Appellate Tribunal for Electricity.
Which of the statements given above are correct?
Consider the following statements regarding the Petroleum and Natural Gas Regulatory Board (PNGRB):
1.PNGRB was the first regulatory body established by the Government of India.
2.One of PNGRB's mandates is to ensure competitive markets for gas.
3.Appeals against PNGRB decisions are heard by the Appellate Tribunal for Electricity (APTEL).
4.PNGRB has authorised City Gas Distribution entities across 309 Geographical Areas covering the entire Indian mainland.
How many of the above statements are correct?
With reference to the Incentive Scheme for Promotion of Domestic PNG Connections, consider the following statements:
1.For each incremental billed domestic connection added beyond the GA threshold, a CGD entity earns an additional allocation of 200 Standard Cubic Metres of APM gas.
2.This APM gas allocation replaces costlier LNG currently used in the CGD entities' Compressed Natural Gas (Transport) segment.
3.The scheme is expected to reduce the payback period on a domestic PNG connection from approximately ten years to nearly three years.
4.The scheme runs in three tranches spread over one year.
Which of the statements given above are correct?
Match the following terms related to India's City Gas Distribution (CGD) sector with their correct descriptions:
List I (Term) — List II (Description)
A.Administered Price Mechanism (APM) gas — 1. Legal permission to use land or public areas for laying PNG pipelines
B.Geographical Area (GA) — 2. Domestically produced natural gas priced below market rates
C.Right-of-Way (RoW) — 3. A licensed zone assigned by PNGRB to a CGD entity for exclusive network development
D.Appellate Tribunal for Electricity (APTEL) — 4. The body that hears appeals against PNGRB decisions
With reference to India's City Gas Distribution (CGD) sector, which of the following statements is/are correct?
1.PNGRB awards Geographical Area licences to CGD entities under the PNGRB Act, 2006.
2.PNG, being lighter than air, disperses quickly in the event of a leak, making it safer than LPG in enclosed spaces.
3.The Incentive Scheme for Domestic PNG Connections also incentivises converting unbilled connections into active billed connections, not only new network expansion.
Select the correct answer using the code given below:
Which of the following best describes the commercial logic of the Incentive Scheme for Promotion of Domestic PNG Connections?
Assertion (A): The scheme rewards CGD entities with additional allocations of cheaper APM gas for every incremental billed domestic connection added beyond a minimum threshold.
Reason (R): APM gas is priced lower than LNG, so substituting it in the CGD entity's sourcing mix reduces overall gas procurement costs and shortens the payback period on household connection capital.
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