Task force suggests measures to boost PNG penetration, reform CGD sector

It has pitched for rolling out 60 lakh new PNG connections by June, states mandating PNG in all new buildings and reduction on Value Added Tax on PNG

A task force set up by the government has proposed a slew of measures to transform the City Gas Distribution (CGD) sector and accelerate the adoption of Piped Natural Gas (PNG) connections. This comes against the backdrop of energy supply issues caused by the West Asia crisis.

 

The task force has pitched for rolling out 60 lakh new PNG connections by June 2026, states mandating PNG in all new and under-construction buildings, reduction in value-added tax (VAT) on PNG, mandating PNG for commercial food establishments where infrastructure exists, and simplifying forest clearances for underground CGD pipeline crossings along existing road corridors.

   

"India's PNG expansion has reached an execution inflection point. Pipeline infrastructure exists — the bottleneck is last-mile speed," the PNG Acceleration for Clean Energy (PACE) task force said in its report.

 

The task force has also called for repositioning liquefied petroleum gas (LPG) distributors as gas transition partners and onboarding them as direct marketing agencies to acquire domestic PNG customers. It has also called for speeding up the transition to smart prepaid meters for PNG supply.

 

"It is recommended the industry adopts a collaborative approach for aggregated procurement, including floating an industry-level tender, similar to the model followed under PNG Drive 2.0 and how Energy Efficiency Services Ltd (EESL) have transformed usage of LED lights. This will help leverage economies of scale, optimise costs, and accelerate adoption across geographies," the panel said.

 

The panel has recommended that the petroleum ministry and the commerce ministry must work together on the idea of nil import duty and fast-track statutory clearances for 21 lakh smart meters, 18 lakh regulators, and isolation and appliance valves.

 

The panel said in its report that the transition from LPG to PNG remains fragmented due to the absence of an integrated ecosystem across stakeholders, including CGDs, oil marketing companies, LPG distributors, and local authorities. "Current processes are largely manual, resulting in data silos, dual connections, delayed LPG discontinuation, and limited visibility on conversion progress at a household and geographic level," it said.

 

As a solution, the panel has suggested mapping of household addresses via municipal corporations and auto-triggering LPG discontinuation after PNG commissioning. The panel has said the Secretary of the petroleum ministry should instruct oil marketing companies to initiate LPG-free zone mapping and begin LPG cut-off enforcement in PNG-active areas.

 

For areas where pipeline infrastructure does not exist, CGD companies must reach customers through alternative supply models such as mini liquefied natural gas (LNG) cryogenic cylinders delivered on light commercial vehicles (LCVs), according to the panel. 

The seven-member task force was set up by the Petroleum and Natural Gas Regulatory Board (PNGRB). It is headed by Rahul Tandon, Business Head – Gas, Bharat Petroleum Corporation Ltd (BPCL).