India Boosts Natural Gas Infra Amid LPG Crisis, Mandates PNG Switch

The Indian Ministry of Petroleum and Natural Gas (MoPNG) has taken a significant step to bolster the nation's natural gas infrastructure and mitigate ongoing energy supply challenges by issuing a new directive. On March 24, 2026, the Ministry notified the 'Natural Gas and Petroleum Products Distribution (Through Laying, Building, Operation and Expansion of Pipelines and Other Facilities) Order, 2026' under the Essential Commodities Act, 1955. This comprehensive order aims to streamline and accelerate the development and expansion of natural gas pipelines across India, particularly focusing on piped natural gas (PNG) networks for domestic, commercial, and industrial consumers, as well as compressed natural gas (CNG) for transport. The primary impetus behind this reform is the critical LPG supply shortage currently being experienced in India. The conflict in West Asia, particularly disruptions in global shipping lanes like the Strait of Hormuz, has severely impacted India's energy imports. India is heavily reliant on LPG imports, with approximately 60% of its demand met through imports, 90% of which originate from the Middle East. These disruptions have led to a pressing need to diversify India's energy sources and enhance domestic gas distribution capabilities. The new order introduces a robust and time-bound framework designed to overcome long-standing hurdles in infrastructure development. Key provisions include mandates for various public entities – encompassing central and state governments, urban authorities, and local bodies – to grant necessary permissions for pipeline laying and expansion within specified timelines. Crucially, the order stipulates that if these authorities fail to respond within the stipulated period, the approvals will be 'deemed granted,' thereby eliminating bureaucratic delays. For instance, permissions for laying pipelines in housing areas are to be granted within three days of application, and approvals for last-mile connectivity within 48 hours. One of the most impactful provisions of the new directive is the mandate for households to switch from LPG to PNG where piped gas connectivity is available. The order states that LPG supply to households may be terminated within three months if they refuse to opt for a PNG connection, unless it is technically infeasible to provide such a connection. This measure aims to free up LPG supplies from areas with pipeline access, allowing them to be redirected to regions still lacking PNG infrastructure, and promoting a broader 'fuel diversification' strategy. Furthermore, the order seeks to create a more transparent and investor-friendly environment for gas distribution companies. It addresses the issue of arbitrary levies and charges by introducing standardized land-use charges, often referred to as 'dig and pay' or 'dig and restore' mechanisms. This standardization is expected to reduce compliance burdens, simplify procedures, and foster greater investment in the sector. The Ministry's goal is to reduce regulatory bottlenecks and create a predictable operating environment for all stakeholders, thereby significantly improving the ease of doing business. This push for expanding PNG networks is anticipated to add 15 lakh new PNG connections in the coming weeks, addressing last-mile connectivity challenges in urban areas. State and district-level committees are being formed to expedite City Gas Distribution (CGD) applications and resolve grievances. Ahmedabad, for example, has already fast-tracked PNG pipeline works by granting a record 820 road opening permits in a single day. The government has also linked additional commercial LPG allocation to states that facilitate the expansion of CGD networks. The move is a direct response to the 'still worrisome' LPG situation, where despite increased domestic production and prioritized supplies for households, panic buying and supply disruptions persist. By rapidly expanding natural gas infrastructure and encouraging a switch to PNG, India aims to enhance its energy security, promote cleaner fuels for various applications, and transition towards a more sustainable gas-based economy. The order's immediate effect underscores the urgency with which the government is addressing these critical energy challenges.

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