Mahanagar Gas and Indraprastha Gas shares rose more than 3% in early trade on Wednesday after the government approved incentives to accelerate household PNG connections. The scheme will give city gas distributors additional lower-priced domestic gas for every incremental billed PNG connection above a set threshold.
Shares of Mahanagar Gas are trading at Rs 1,154 apiece, gaining 3.83% from its previous close at Rs 1,111.4, while Indraprastha Gas shares climbed 3.49% to Rs 153.85 apiece from its previous close at Rs 149.39, on National Stock Exchange.
The incentive scheme will take effect from September 1, 2026, and aims to help gas companies activate unused PNG connections and expand into new areas. This could boost new connections and improve network utilisation.
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Incentive Scheme for PNG Connections
Under the scheme, eligible CGD entities will receive an additional 200 SCM of domestically produced, lower-priced APM gas for every incremental billed domestic PNG connection achieved above the threshold level set for their respective geographical areas.
The scheme will be implemented in two tranches over six months. The additional APM gas allocation will replace a portion of the costlier LNG currently procured by CGD entities for their CNG transport segment, potentially lowering their overall gas-sourcing costs.
The government currently estimates 1.74 crore domestic PNG connections across India. The new incentive is intended to encourage CGD companies to speed up conversions and expand household access to piped gas.
Lower Costs, Faster PNG Expansion
The government said the cost savings could significantly improve the economics of adding domestic PNG connections, potentially cutting the payback period for capital expenditure from around 10 years to about three years. This could give city gas distributors a stronger push to expand their household customer base.
The move comes alongside other measures to encourage PNG adoption, including faster regulatory clearances, efforts to bring VAT on natural gas down to 5% and the launch of National PNG Drive 2.0. A unified digital portal to register and track new PNG connections is also being developed.
For CGD players such as Mahanagar Gas and Indraprastha Gas, the measures could make new household connections more viable while supporting the government's broader push to increase the use of piped natural gas.
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