The government is now accelerating plans to replace LPG cylinders with piped gas. City gas companies will get an additional 200 SCM of cheaper domestic natural gas from September 1 to boost new domestic PNG connections. The government’s aim is to increase new connections as well as activate existing, dormant ones.
Under the government’s new scheme, eligible city gas distributors (CGDs) will be allocated an additional 200 standard cubic meters (SCM) of domestic gas for every new and billed domestic PNG connection supplied in their area, over and above the target. The scheme will come into effect from September 1 and will be implemented in two phases, each phase lasting six months. The additional gas will be relatively cheap domestically produced APM gas.
According to the government, this additional cheap gas will allow CGD companies to reduce the purchase of expensive LNG to some extent. This will reduce companies’ overall gas purchase costs and make their investments in expanding the local PNG network more profitable. The government estimates that the scheme could reduce the payback period for investments in local PNG connections from around 10 years to around 3 years.
There are currently around 17.4 million domestic PNG connections in India. The government is promoting piped gas as a convenient and relatively cleaner fuel compared to LPG cylinders. The main advantage of PNG is that unlike cylinders it does not require frequent booking and delivery. Gas is continuously supplied through the pipeline, and the bill is paid according to the meter.