India offers city gas suppliers incentives to boost domestic piped connections

Business Recorder reported that the Indian government on Tuesday unveiled incentives for city gas distributors, aimed at expanding piped cooking gas connections in homes. The move comes as the U.S.-Iran conflict disrupts fuel shipments and pushes up import costs. New Delhi hopes the push will reduce its dependence on liquefied petroleum gas imports and the subsidy bill attached to them.

Under the scheme, starting September, distributors will receive an extra 200 standard cubic metres of domestically produced gas for each household that starts paying for piped natural gas after connection. The extra gas is expected to lower overall sourcing costs and shorten the period distributors need to recoup new connection spending to about three years, from roughly 10 at present. Officials also said the incentive targets idle pipe connections and aims to extend the network to new households.

City gas distributor stocks climbed on Wednesday once the scheme was announced, with Indraprastha Gas up 3.5%, Mahanagar Gas gaining 4% and Gujarat Energy adding 0.5%. India, the second-largest LPG importer worldwide, relies on imports for about 60% of its supply, with roughly 22 million metric tons arriving in 2025, largely from the Middle East, at a cost of nearly $12 billion. Domestic PNG connections currently stand near 17.4 million, well below the 331.4 million household LPG users counted as of July 1.