India Turns to Piped Gas as Iran War Drives Up LPG Costs
India Turns to Piped Gas as Iran War Drives Up LPG Costs What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… India’s government is looking to incentivize city gas distributors to increase piped gas connections to raise domestic cooking gas supply to households as the costs of importing liquefied petroleum gas (LPG) have soared since the Iran war choked off supply from the Middle East.
The Government of Indiahas approveda so-called Incentive Scheme for Promotion of Domestic PNG Connections, a major initiative aimed at bringing clean, safe, and affordable piped cooking gas to households across the country.
The scheme, which comes into effect on September 1, 2026, is designed to fast-track the expansion of active piped natural gas (PNG) connections, ensuring that more families can start using piped natural gas in their kitchens at the earliest possible time.
LPG is widely used as a cooking fuel in the world’s most populous country, which is a major importer of the fuel.
But the Middle East conflict has slashed supply from Persian Gulf producers of LPG,forcing India to sourcethe fuel from other suppliers, at higher costs.
Around 60% of Indian households rely on LPG for their primary cooking fuel, and the blockage at the Strait of Hormuz, from where 90% of all Indian LPG imports passed before the war, has been immediately felt by consumers.
The government is now looking to offer incentives to the City Gas Distribution (CGD) companies to actively convert unbilled connections into working gas connections, and expand the PNG network to new areas.
Under the incentive scheme, eligible city gas distributors will be allocated an additional 200 standard cubic meters of domestically-produced, lower-priced gas for every incremental domestic PNG connection.
India plans the scheme to run over two tranches spanning six months.
“The additional gas allocation will substitute the costlier Liquefied Natural Gas (LNG) that CGD entities currently procure for their Compressed Natural Gas (Transport) segment, thereby lowering their overall gas-sourcing costs,” the government said.
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