India offers city gas suppliers incentives to boost domestic piped connections (updated)

Bharat Petroleum

19/08/2026 05:07

Adds shares in paragraph 2
Aug 18 (Reuters) - India is offering incentives to gas distributors across cities to boost domestic connections of piped cooking gas, the government said on Tuesday, as the U.S.-Iran conflict disrupts fuel shipments and drives up import costs.
Shares of city gas distributors rose after the announcement, with Indraprastha Gas IGAS.NS climbing 3.5%, Mahanagar Gas MGAS.NS gaining 4% and Gujarat Energy GJAA.NS rising 0.5% on Wednesday.
India, the world's second-largest liquefied petroleum gas importer, has been using the cooking gas crisis sparked by the Middle East war to plug gaps in its distribution network and speed up the shift to piped gas in a bid to cut down on LPG imports and spending on subsidies. 
Under the incentive scheme, effective September, city gas distribution companies will get an additional 200 standard cubic metres of cheaper, domestically produced gas for every household they connect to, which starts using and paying for piped natural gas.
The scheme will incentivise city gas distributors to turn unused pipe connections into active, paying customers, and extend the pipeline network to reach new households, the ministry of petroleum and natural gas said.
The extra gas, which will lower overall gas-sourcing costs,  is also expected to help distributors recoup their investment in new connections in about three years, down from roughly 10 currently, the government said.
Since the start of the war, suppliers including Indraprastha Gas, Mahanagar Gas, GAIL Gas and Bharat Petroleum Corp BPCL.NS have offered incentives such as reductions in installation charges for piped gas connections.
India currently has about 17.4 million domestic PNG connections, the government said Tuesday. That compares to about 331.4 million active household LPG customers as of July 1.
India meets about 60% of its LPG needs through imports. It shipped in about 22 million metric tons of LPG in 2025, mostly from the Middle East, spending nearly $12 billion.

 (Reporting by Chris Thomas in Mexico City and Kashish Tandon in Bengaluru; Editing by Diti Pujara and Ronojoy Mazumdar)
 ((chris.thomas@thomsonreuters.com;))