Families in distress due to ban on LPG connections and PNG shortage

Families living in many areas are currently facing dual difficulties in obtaining gas. On one hand, government gas agencies have stopped issuing new domestic Liquefied Petroleum Gas (LPG) connections in certain areas, while on the other hand, companies supplying Natural Gas (PNG) via pipelines find it cheaper to pay penalties rather than bearing the high cost of delivering connections to the last mile property. According to a report by Hindustan Times, this situation has put consumers in distress.

In areas where PNG is available or where it is being made available, distributors have been instructed not to provide new domestic LPG connections with 14.2 kg cylinders. This ban is causing major problems for families who, despite living in areas under City Gas Distribution (CGD) licenses, are unable to obtain PNG connections. Additionally, it has been learned that in some areas where families do not have individual PNG connections, restrictions have also been imposed on providing refills for existing connections.

City Gas Distribution companies do not extend pipelines to remote areas located within their authorized geographical areas, as the cost of providing connectivity to the far reaches is very high. Due to this, some families have been forced to rely on expensive 5 kg and 10 kg LPG cylinders. Some consumers are also being driven to purchase domestic cylinders from the black market.

A parliamentary panel drew attention to this issue in a report on the subject of “Supply and Distribution of Natural Gas – Challenges and Prospects” presented in August. Explaining the limitations to this committee, the Ministry of Petroleum stated that if asked currently whether PNG will reach every household, the answer is no, it will not reach, because the initial cost of supplying gas through pipes is very high.

According to the Ministry, CGD companies bid for licenses to develop networks in specific geographical areas, in which they promise to provide a certain number of PNG connections and establish a certain number of Compressed Natural Gas (CNG) stations. Companies that fail to meet their targets have to pay penalties prescribed by the Petroleum and Natural Gas Regulatory Board (PNGRB).

The Petroleum Ministry told the committee that they have asked the regulator to impose penalties on CGD companies for not meeting their targets. According to a quote from the Ministry in the report, some people say that these companies are even happy to pay the penalties because the cost of providing natural gas connections through pipes is higher than the penalty. Regarding this matter, the Petroleum Ministry, PNGRB, and government energy companies such as Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), and GAIL India have not responded to email inquiries.

In a written reply in the Lok Sabha on August 2, 2021, then Petroleum Minister Hardeep Singh Puri stated that a total penalty of ₹ 21.8 crore had been imposed on various CGD entities, including GAIL Gas Limited, Avantika Gas Limited, Maharashtra Natural Gas Limited, City Energy Limited, and Sanvaraya Gas Limited, for various violations.

According to a presentation by the monitoring department of PNGRB in April 2026, a total penalty of ₹ 34.31 crore was imposed in 20 geographical areas for deficiencies in the minimum work program targets of domestic PNG connections and pipeline infrastructure. Experts say that given the scale of the country's ambitions for PNG and CNG infrastructure, this penalty is very small to incentivize companies to expand networks in commercially non-viable areas.

According to the parliamentary committee report, under the minimum work program, authorized entities need to provide approximately 12.6 crore domestic PNG connections and establish 18,336 CNG stations by 2034. By January 31, 2026, companies have provided approximately 1.63 crore domestic PNG connections and established 8,616 CNG stations.