What Happened
- The Ministry of Petroleum and Natural Gas issued a gazette notification amending the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order, barring households with Piped Natural Gas (PNG) connections from retaining or obtaining domestic LPG cylinders.
- The order requires households with both PNG and LPG connections to immediately surrender their domestic LPG connection — they cannot receive new cylinders or refills from Oil Marketing Companies or their distributors.
- The Petroleum and Natural Gas Regulatory Board (PNGRB) simultaneously directed City Gas Distribution (CGD) companies to accelerate the rollout of PNG connections, prioritising areas where pipeline infrastructure is already in place.
- The move aims to redirect scarce LPG supplies to households that lack piped gas access, particularly those in rural areas or cities not yet covered by CGD networks.
- The policy comes as a supply crunch caused by disruption to West Asian LPG imports through the Strait of Hormuz has strained India's cooking gas availability.
Static Topic Bridges
Petroleum and Natural Gas Regulatory Board (PNGRB)
The PNGRB was established under the Petroleum and Natural Gas Regulatory Board Act, 2006. It is the statutory regulator for entities engaged in refining, processing, storage, transportation, distribution, marketing, and sale of petroleum, petroleum products, and natural gas — excluding upstream production. A key mandate is the development and regulation of City Gas Distribution (CGD) networks, through which it grants authorisation to entities to develop CGD infrastructure in specified Geographical Areas (GAs) of the country.
- Established: 2006 under the PNGRB Act, 2006
- Nodal Ministry: Ministry of Petroleum and Natural Gas
- Key functions: Authorises CGD network operators, enforces pipeline safety standards, regulates tariffs for gas transportation
- Distinct from: The Directorate General of Hydrocarbons (DGH), which oversees upstream oil and gas exploration
Connection to this news: PNGRB directed CGD companies to fast-track domestic PNG rollout as part of the government's demand management response to the LPG supply crunch — a direct use of its CGD authorisation and oversight powers.
City Gas Distribution (CGD) Networks and PNG
City Gas Distribution refers to the distribution of natural gas to domestic, commercial, and industrial customers within a geographical area through a pipeline network. Domestic PNG supplies piped natural gas directly to household kitchens, replacing cylinders. Compressed Natural Gas (CNG) is supplied to transport vehicles through the same CGD infrastructure. India has been expanding CGD coverage through PNGRB-authorised bidding rounds — the 11th and 12th CGD bidding rounds significantly expanded the network.
- India has over 33 crore domestic LPG connections; PNG penetration is considerably lower, concentrated in metros and Tier-1 cities
- PNG is considered a more reliable, uninterrupted, and cost-effective cooking fuel than bottled LPG over the long run
- The government's aim of displacing LPG with PNG is also an import-substitution strategy, since natural gas for PNG is increasingly sourced domestically or through long-term LNG contracts
- Unlike LPG (import-dependent), domestic natural gas reduces the Hormuz chokepoint vulnerability
Connection to this news: The mandatory surrender of LPG connections by PNG users is an immediate demand-side response, while the directive to accelerate PNG rollout addresses the structural supply-demand imbalance for LPG over the medium term.
LPG Subsidy and Oil Marketing Companies (OMCs)
Domestic LPG in India is sold below market price with the subsidy routed through Direct Benefit Transfer (DBT) to eligible beneficiaries. Three public-sector Oil Marketing Companies — Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) — handle procurement, storage, bottling, and distribution of LPG through their dealer networks. Under the PAHAL scheme (launched 2014), LPG subsidy is transferred directly to beneficiaries' bank accounts (DBT-LPG), removing ghost beneficiaries and leakage.
- India has approximately 33 crore domestic LPG connections as of 2026
- Pradhan Mantri Ujjwala Yojana (PMUY), launched May 1, 2016, added over 10.33 crore connections for BPL women households (as of March 2025)
- OMCs collectively manage over 25,000 bottling plants and distributor networks across India
- Under the amended LPG Order, OMCs and their distributors are the enforcement point — they will not service cylinders for PNG households
Connection to this news: The policy leverages the OMC distribution system as the enforcement mechanism — PNG households are identified at the distributor level, ensuring LPG supplies are rerouted to non-PNG households, particularly PMUY beneficiaries in underserved areas.
Key Facts & Data
- India has approximately 33 crore domestic LPG connections nationally
- PMUY added over 10.33 crore connections for BPL women households since its launch on May 1, 2016
- India imports roughly 60% of its LPG requirement; about 90% of those imports transit the Strait of Hormuz
- PNGRB was established under the PNGRB Act, 2006, and authorises all CGD network operators in India
- The amended LPG regulation was published in the Gazette of India and took effect from the date of publication
- PNG is supplied via underground pipeline networks under PNGRB-authorised CGD operators; once connected, a household has uninterrupted cooking gas without cylinder logistics
- The minimum gap between LPG bookings was simultaneously increased from 21 to 25 days as a temporary demand management measure