Driven by the West Asia crisis squeezing LPG imports, the Centre has enforced a mandatory transition to Piped Natural Gas (PNG) for urban households wherever pipeline infrastructure exists. Under the new directive released last week, LPG supply will be discontinued if the consumer fails to apply within a three-month window.

Yet, while the policy aims to insulate kitchens from global volatility, the ground-level friction reveals structural and practical hurdles.

For Sakshi, a student at Delhi University who lives in a rented flat near the north campus, the national push for PNG ends at the whim of her landlord. Despite her area being connected to the pipeline, her kitchen remains tethered to the traditional LPG cylinder.

“We have PNG connectivity available, but we don’t have the connection in our kitchen yet,” she said.

The reason? A landlord who sees the upfront security deposit for the PNG connection as an unnecessary cost for a property he doesn't inhabit.

She isn’t alone. Sakshi is one among several renters in metro cities where it is simpler for non-resident landlords to refrain from installing piped gas and let the tenants navigate the logistics and costs of LPG cylinders. What looks like a localised preference also turns into a formidable structural barrier stalling the government’s ambitious gas-based economy mandate.

However, in the vertical sprawls of the National Capital Region (NCR), things are a bit different. In high-rise condominiums where towers reach 25 floors, PNG comes with the baseline infrastructure.

“Our connection was part of the builder amenity plan. Almost every flat here has it from the start because the architectural design, with dedicated balconies for pipeline fitment, makes it seamless,” Sudarshana Kashyap, a tenant and resident of Lotus Panache in Noida told The Core.

This stark divide between older rented blocks and modern high-rises defines one amongst the many on-ground bottlenecks in domestic PNG installations in the country.

Challenges On-Ground

India’s PNG rollout is currently lopsided, divided into three distinct phases. In established urban hubs, backbone pipeline infrastructure is already under the street. Meanwhile, in Tier-2 and Tier-3 cities, it is being laid out gradually. However, remote regions are far behind and rely heavily on LPG cylinders and other alternatives.

Even in metro cities where PNG connectivity is available, in high-density builder floors, narrow shafts and poor ventilation sometimes make external Galvanised Iron (GI) piping technically unsafe or unfeasible. This structural challenge is compounded by the difficulty of drilling through ageing masonry.

Safety concerns have also moved to the forefront following recent pipeline ruptures that have disrupted supply and raised environmental alarms.

As per Minimum Work Programme (MWP) targets, Petroleum and Natural Gas Regulatory Board (PNGRB) aims to enable approximately 12.63 crore domestic PNG connections by 2034.

Current data as of January 2026 reveals that while total connections reached 1.65 crore — up from 1.42 crore as of January 2025 — the sector is significantly off-track from its long-term targets. Compounding this slow rollout is a significant utilisation gap – of the 1.65 crore connections reported, only 1.03 crore are active.

A fragmented state-level regulatory landscape is the primary barrier to meeting PNG growth targets, Dr KR Kaushik, Former Deputy Director General of the Association of City Gas Distribution (CGD) Entities (ACE), told The Core. He said there is a need for a unified long-term national-level CGD policy to resolve the patchwork of varying rules and VAT charged by the states.

ICRA’s Senior Vice President and Co-Group Head, Corporate Ratings, Prashant Vasisht, told The Core that household PNG connections have generally lagged official targets. He attributed this to the "host of approvals" required for capex that stifle rollout speed, alongside consumer hesitation over "upfront deposit requirements.”

Behaviour Psychology Constraints

Many LPG users, including Sakshi’s landlord and independent homeowners, view the initial security deposit for a PNG connection — ranging from Rs 6,000 to Rs 9,000 — as a blocked expense. This psychological barrier, combined with fears over infrastructure integrity, is a major challenge that keeps several households tethered to old habits of procuring the cylinder.

“Unlike LPG, which offers immediate incentives like free stoves (chulhas), PNG requires a psychological shift. We see massive capex investments by the companies, yet consumers refuse connections despite the available network, due to a lack of awareness and the absence of upfront perks,” Dr Kaushik told The Core.

On the brighter side, the PNG business is quite sticky — once connected, consumers rarely switch. To capitalise on this, Vivek Jain, Director at India Ratings & Research told The Core there is need for a shift in public perception with government initiatives towards national awareness campaigns to educate households on the economic and logistical advantages of piped gas.

Meanwhile, an industry insider shared that in a race to hit targets, gas companies have in the past focused on installing more meters and headline connection numbers over actual gas flow. Many of these installations were done with no upfront payment and companies counted them as connections on paper, even if the final infrastructure work wasn’t finished or the consumers changed their minds. This left several homes with a meter on the wall but no piped gas connectivity in the kitchen.

The immediate priority probably lies in activating those dormant meters already installed in households.

Policy Pivot Turns Aggressive

To maintain household fuel momentum amid import shortages triggered by the West Asia crisis, the Centre has urged domestic LPG users to switch to PNG, citing better supply reliability.

The CGD industry currently relies on domestically produced natural gas for about 60% of its requirement, while imports account for the remaining 40%. The sector has three segments — compressed natural gas (CNG), piped natural gas domestic (PNG D) and piped natural gas industrial and commercial (PNG I&C).

CNG and PNG-D together account for about 70% of the industry’s sales volume and are expected to be the least affected as natural gas supply for these segments largely comes from domestic sources, as per a March note from Crisil Ratings. Besides, the government has designated this sector as a high-priority area for gas allocation.

However, the ratings agency expects the industry's daily sales volume to decline by 8-10% primarily due to curtailment of supply to I&C customers.

What’s The Mandate Now?

Last week, India mandated a uniform framework to bypass infrastructure hurdles. The order caps approval fees, sets "deemed granted" timelines, and enforces land access.

While the directive for rollout is aggressive, coverage is localised. Consumers are required to verify their area’s gas-ready status before applying.

It remains to be seen if this transitions into actual progress on-ground. Emails sent to Indraprastha Gas Limited (IGL) and Mahanagar Gas Limited (MGL) by The Core did not elicit any response.

Leading providers include government-owned GAIL, MGL, IGL and Bharat Petroleum Corporation Limited (BPCL). Sujata Sharma, Joint Secretary at the Ministry of Petroleum and Natural Gas said the companies have rolled out incentives to encourage customers.

Private players in the sector include Adani Total Gas, Think Gas, Megha City Gas Distribution, Torrent Gas, amongst many others.

Cost Economics Of Infrastructure

“Infrastructure must precede consumption,” GAIL Chairman and Managing Director Sandeep Kumar Gupta told The Core earlier, emphasising that large-scale physical networks and disciplined investment are essential prerequisites.

A crucial step in infrastructure build up for PNG connectivity is financing as the initial investment for private CGD companies could be daunting. Unlike the high-margin, cash-and-carry CNG model, PNG infrastructure demands heavy upfront capital with a significantly stretched payback period.

To ease this burden, Jain suggests the government should consider providing soft loans to private players to offset the massive last-mile capex. CNG currently accounts for about 45% of CGD entities' annual capex, with PNG D taking up about 25% and PNG I&C at about 30%.

Even the government-owned entities aren’t foolproof. In an earlier conversation with The Core, Kamal Kishore Chatiwal, Managing Director of Indraprastha Gas Limited (IGL), highlighted that initial infrastructure costs for household connections in remote areas can be high. He added that converting entire villages to PNG is a way to improve network capacity utilisation and reduce the selling and distribution (S&D) cost per household.

But the scale up and adoption rate is usually slow.

While infrastructure challenges persist, dense neighbourhoods and building clusters in metros require comparatively lower capital expenditure per connection than spread-out residential colonies in Tier-1 and Tier-2 towns, Vasisht told The Core.

He noted that because CGD entities have operated in metros for decades, these high-density settlements offer better returns.

PNG is slated to capture a 20% market share in Indian kitchens by 2070, according to a February 2026 NITI Aayog report outlining a radical Net Zero Scenario (NZS). While electricity is poised to emerge as the nation's dominant cooking medium in this long-term shift, LPG — the long-standing mainstay — is expected to shrink to just 15%. Traditional biomass is projected to be entirely phased out by the 2040s.

While the national blueprint for PNG connectivity seems ambitious, its ultimate success will be measured not by meters installed on walls, but by the government’s ability to resolve the structural and psychological hurdles on the ground.