LPG reliance highlights gaps in India's piped gas expansion drive

India's dependence on LPG imports and slow expansion of piped gas networks highlight policy gaps, affordability challenges, and consumer behaviour issues hindering a transition to cleaner cooking fuel

A major impact of the West Asia conflict has been to highlight India’s dependence on that region for its liquefied petroleum gas (LPG), a fixture of most kitchens across the country. At the same time, it has also laid bare the meagre penetration of domestic piped natural gas (DPNG) in households, limited largely to urban centres at that.

 

National data from the end of March 2026 shows that there were 1.64 crore households with a DPNG connection. Since FY22, the annual addition of PNG connections has been about just 10 lakh – they were minuscule before that – as per data from the Petroleum and Natural Gas Regulatory Board (PNGRB). The number of LPG consumers, however, has almost doubled from 17.44 crore in FY15 to 33.5 crore in FY26. Even in a highly urbanised centre like Delhi-NCR, the number of piped gas connections is only about a tenth of the total number of households: 1.9 million of 11.5 million households.

Why does India still rely heavily on LPG over piped gas?

The disparity shows the distance the central government has to travel to bridge the gap between LPG as the choice of energy in kitchens and the adoption of DPNG.

 

To address that gap – partially fuelled by a break in LPG supplies from West Asian nations – the Centre has launched a nationwide drive to wean customers away from LPG to DPNG. The Ministry of Petroleum and Natural Gas has banned consumers who already have access to piped gas from retaining their LPG connections.

What policy choices slowed PNG adoption in India?

In spite of the order, though, the switch remains a long haul. The difference has widened over the years because of a conscious policy adopted by the central government in India’s energy mix to promote LPG usage aggressively for more than a decade. While the Pradhan Mantri Ujjwala Yojana (PMUY) campaign was aimed at making rural customers switch from traditional, but polluting, fuels – usually firewood, coal, or cow dung cakes – to cleaner LPG, it has been more successful in non-metro urban areas.

 

A key restricting factor is that DPNG, mostly marketed by private sector companies, was largely overlooked by the government in its promotion of cleaner cooking fuel, even as it pushed LPG – marketed only by state-run oil marketing companies (OMCs) – with promises of free connections and a free first cylinder. Not surprisingly, there remains a huge difference in the number of subscribers to each that has stubbornly refused to come down.

Why has PNG rollout faced regulatory and business hurdles?

The lack of government interest has also rubbed off on regulators. The PNGRB had in June 2025 set up a committee with representatives from gas companies and experts to develop a roadmap for the implementation of smart DPNG meters across the country. The five-member committee was asked to give its report within two months to make the business more viable for companies selling PNG. That report has only now been submitted to the PNGRB after almost a year.

 

While smart metering was considered an incentive to help spread DPNG, the 40-odd companies that have the mandate to supply it have discovered that the denser the network, the less profitable the business becomes.

 

“Industry data indicates that a significant proportion of domestic consumers default on payments, resulting in substantial financial and operational burden for CGD entities,” said one company executive, on condition of anonymity. One of the reasons is that consumers buy a DPNG pipeline but abandon its use, falling back on a cheaper LPG connection.

 

PNGRB data shows that defaulting consumers in any region or circle are at about 10 per cent, rising to as much as 30 per cent in some places. The average dues from defaulting customers are about Rs 8,500. Since the cost of terminating a connection is Rs 2,700, a third of the dues, companies typically prefer to let the dues mount. They make good on the loss by restricting the pace of new connections. The situation is made worse given that there is a local monopoly in all geographical regions where PNG is available. In the absence of competition, these companies (see list) find little reason to compete for the number of consumers.

What are the consumer and cost barriers to switching to PNG?

A senior industry executive noted that in urban areas where colonies have no high-rise buildings, the level of pilferage or wilful damage is particularly high. These colonies often house migrant workers living in rented houses. Because of the upfront high cost of installation, landlords are typically reluctant to offer piped gas. Also, since an LPG connection is cheaper and easier to obtain, tenants find the compromise to their benefit.

 

LPG has been promoted since 2015 by the Centre with several measures. The first of these was the “Give it up” campaign, meant to nudge consumers with more than one cylinder connection to surrender extra ones.

 

It worked well, with OMCs reporting a drop of nearly one crore connections. The headroom created by the returnees was used to create the PMUY to provide LPG in villages. It aimed to provide 5 crore cooking gas connections to women from Below Poverty Line (BPL) households, most of whom use wood- or coal-fired stoves, which are more polluting and increase health risks, besides kerosene stoves. The new connections were issued in the name of an adult woman of the household with an initial financial support of Rs 1,600 per connection.

 

Several studies showed the scheme created impressive results, like cutting down on smoke-related illnesses, besides, of course, being a time-saver for women. Initiatives like a single Deprivation Declaration, replacing the earlier multi-point self-declaration system, have made access faster and more inclusive. By March 2026, there were about 10.56 crore PMUY connections across the country.

 

For each LPG connection, which initially costs Rs 4,140, the Centre pays a subsidy of close to Rs 2,000 for each BPL household. For a piped gas connection, the upfront cost is higher at Rs 6,618, going up to Rs 8,350 for a smart meter. To make the equation look better, the 10 largest PNG companies offer a set-off from initial costs (see table), but even this has not moved the needle much.

Can India accelerate the shift to piped gas networks?

Now, the Centre wants this to change. The PNGRB launched a national PNG drive in January 2026 to accelerate the rollout of domestic gas infrastructure, with time-bound targets. While the drive has been extended, with 6.5 lakh new connections installed by the end of March, demand for actual supply is lower by over 18 per cent, reflecting a reluctance to switch to DPNG.