Mandatory PNG Switch: India to Discontinue LPG Supply for Households

The Indian government has enacted a significant policy change, mandating that households equipped with Piped Natural Gas (PNG) connectivity must transition away from Liquefied Petroleum Gas (LPG) cylinders within three months of official notification. Failure to comply will result in the discontinuation of LPG supply to those addresses. This directive is part of the newly notified 'Natural Gas and Petroleum Products Distribution (Through Laying, Building, Operation and Expansion of Pipelines and Other Facilities) Order, 2026,' issued by the Ministry of Petroleum and Natural Gas on March 24, 2026. The primary driver behind this policy is the ongoing geopolitical instability, particularly the conflict in West Asia, which has severely disrupted global energy supply chains. India, heavily reliant on imported LPG (importing approximately 60% of its total LPG requirements, with 90% passing through the Strait of Hormuz), is grappling with concerns over cooking fuel shortages. Damage to Qatar's liquefaction facilities and the continued blockage of the Strait of Hormuz have further exacerbated these supply disruptions, pushing the government to accelerate the shift towards domestically produced and diversified energy sources like PNG. Under the new order, if a household fails to apply for a PNG connection despite its availability within three months of receiving formal communication from the authorized city gas distribution (CGD) entity, their LPG supply will cease. An exception is made only if it is deemed 'technically infeasible' to provide a PNG connection, subject to a No-Objection Certificate (NOC) issued by the authorized entity. However, such NOCs must be revoked once PNG becomes operationally viable. The policy also addresses infrastructural bottlenecks and aims to streamline the expansion of the natural gas pipeline network. It mandates that housing societies and residential areas must grant access for pipeline installation within three working days of an application. If access is denied, the gas company can escalate the matter and issue public notices, leading to a potential cessation of LPG supply for all addresses within that housing area three months after the notice date. The Petroleum and Natural Gas Regulatory Board (PNGRB) has been designated as the nodal agency to monitor the implementation of this order, ensuring compliance and tracking approvals. Joint Secretary in the Ministry of Petroleum and Natural Gas, Sujata Sharma, highlighted that around 6 million households currently have PNG infrastructure available but continue to use LPG. She emphasized that the transition is in the national interest, as India domestically produces about 50-60% of its natural gas, reducing dependence on volatile international markets. As of March 2026, approximately 2.5 lakh new PNG connections have been provided, with 2.2 lakh LPG users already making the switch. Furthermore, in response to the perceived 'fuel crisis' and reports of businesses levying additional charges, the Central Consumer Protection Authority (CCPA) issued an advisory on March 24-25, 2026. The CCPA directed hotels and restaurants not to impose additional charges like 'LPG charges,' 'fuel cost recovery,' or 'gas crisis charge' on consumers. Such levies are considered unfair trade practices and violations of existing guidelines, as input costs like fuel should be integrated into menu pricing rather than passed on as compulsory surcharges. This policy is a multi-pronged approach by the Indian government to enhance energy security, promote cleaner fuels, and optimize the distribution of existing LPG supplies by diverting them to regions where PNG infrastructure is not yet established. It also aims to improve the ease of doing business for CGD companies by setting clear timelines for permissions and addressing right-of-way disputes.

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