India Mandates Shift to Piped Natural Gas in Connected Areas, Phases Out LPG Supply
The Indian government has intensified efforts to expand gas networks and reduce reliance on single fuel sources by implementing a new policy that will stop supplying liquefied petroleum gas (LPG) to households refusing to switch to piped natural gas (PNG) in regions where such infrastructure is already operational.
This strategic move coincides with global oil supply disruptions triggered by the ongoing Middle East crisis. As the situation persists, authorities are actively promoting PNG as a viable alternative for both residential and commercial users, emphasizing its continuous pipeline supply that eliminates the need for frequent cylinder refills.
Policy Framework and Key Directives
The directive has been formalized through the Natural Gas and Petroleum Products Distribution (Through Laying, Building, Operation and Expansion of Pipelines and Other Facilities) Order, 2026, notified by the Ministry of Petroleum and Natural Gas. This order prioritizes accelerating pipeline infrastructure development, streamlining approval processes, and encouraging a nationwide transition from LPG to PNG to bolster energy security.
Additionally, the policy aims to optimize LPG distribution by reallocating supplies from areas with existing pipeline access to those without, while supporting fuel diversification amidst ongoing global disruptions, including damage to liquefaction facilities in the Gulf and restrictions around the Strait of Hormuz.
Implementation and Compliance Requirements
Under the order's provisions, households located in areas with available PNG connectivity must make the switch. It explicitly states that LPG supply shall cease after three months if a household does not opt for PNG. However, flexibility is provided for cases where providing a piped connection is technically infeasible, allowing continued LPG supply through a no-objection certificate (NOC).
Oil Secretary Neeraj Mittal explained the reform's intent in a social media post, noting that a crisis has been turned into an opportunity, linking the changes to ease of doing business initiatives.
Streamlined Approvals and Enforcement Mechanisms
Issued under the Essential Commodities Act, the order emphasizes expediting approvals for pipeline projects by introducing:
- Time-bound clearances
- Standardized charges
- Simplified procedures to ensure faster infrastructure execution
Public authorities must grant permissions or right of way within specified timelines, with approvals treated as automatically granted if deadlines are missed. They are also prohibited from levying charges beyond those prescribed under the framework.
In residential clusters, managing entities must provide permissions within three working days, while last-mile PNG connections should be completed within 48 hours. Applications for pipeline connectivity in such areas cannot be rejected arbitrarily.
Dispute Resolution and Oversight
To address land access and permission disputes, the order empowers designated officers with authority akin to a civil court to grant right of way where necessary. Pipeline operators face strict timelines, requiring them to begin laying pipelines within four months of approval, with non-compliance potentially leading to penalties like loss of exclusivity rights.
The Petroleum and Natural Gas Regulatory Board (PNGRB) oversees implementation, tracking approvals, rejections, and compliance across all involved entities. If housing authorities fail to grant pipeline-laying permissions, a notice will be issued, and if unresolved after three months, oil marketing companies will halt LPG supply to affected households.
Exceptions and Record-Keeping
Households notified by authorized entities must apply for and obtain PNG connections where pipelines are laid, with LPG supply ceasing three months from the communication date. An exception exists for technical limitations: LPG supply will not stop if an authorized entity issues an NOC due to technical infeasibility.
Authorized entities must maintain detailed records explaining infeasibility reasons and withdraw the NOC once piped gas supply becomes operational for those households.
