New Delhi [India], August 27 (ANI): The City Gas Distribution (CGD) network in India now spans 307 Geographical Areas (GAs), covering nearly 100 per cent of the country’s geographical area, except for islands, and touching around 784 districts across 34 states and Union Territories, Petroleum and Natural Gas Regulatory Board said in a statement.
As part of India’s transition toward a cleaner and more sustainable energy future, and in line with the Prime Minister’s vision of increasing the share of natural gas in the country’s energy mix, the expansion of the City Gas Distribution (CGD) network through Piped Natural Gas (PNG) connections has emerged as one of the key performing areas.
In the statement, the Board said that the government has undertaken a series of policy and regulatory measures to catalyse growth in this sector.
These measures range from allocating administered price domestic gas and easing supply mechanisms to mandating PNG (piped natural gas) provisions in government and defence residential complexes, granting Public Utility status to CGD projects, and directing the CPWD and NBCC to include PNG provisions in all government residential complexes.
These measures, according to the Board, have helped keep the prices of domestic piped natural gas and compressed natural gas (CNG) attractive for consumers converting from LPG and liquid transport fuels.
PNGRB has set a Minimum Work Programme (MWP) target of 12.63 crore PNG domestic connections, 18,336 CNG stations, and 5.46 lakh km of pipeline infrastructure to be achieved by 2034, as stated in a press release.
“To achieve the target, a strong and coordinated synergy between the States and the entities is imperative. Recognising the crucial role of state governments in enabling effective last-mile connectivity and sustainable energy access, PNGRB has been engaging extensively with various state authorities to address key policy and infrastructural challenges in the CGD sector and to promote collaborative efforts for fast-tracking the implementation of natural gas infrastructure projects to facilitate the use of clean and sustainable energy in the states,” said the Board.
PNGRB leadership, including its Chairperson, has held several meetings with Chief Ministers, Lt Governors, Chief Secretaries of states — Assam, Maharashtra, Andhra Pradesh, Uttarakhand, Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Bihar, Tamil Nadu, Rajasthan, Jammu and Kashmir, Andaman and Nicobar Islands, amongst others.
These high-level engagements focused on key policy and operational issues critical to the CGD sector.
The discussions emphasised the importance of rationalising VAT on domestic natural gas and Compressed Natural Gas (CNG) to make clean fuels more economically viable for consumers.
“States were encouraged to formulate and implement comprehensive state CGD policies to streamline approvals and enhance infrastructure development. Necessary assistance was also offered to states,” the Board said.
Over the past two years, continued engagement and dialogue with State government authorities have led to the formulation of State CGD policies across various states.
Recently, CGD policies/directives for the promotion and use of natural gas were notified by the States of Madhya Pradesh, Bihar, and Rajasthan.
As of July 2025, 11 States/UTs namely Punjab, Uttar Pradesh, and West Bengal (only laying policies), and Assam, Tripura, Tamil Nadu, Puducherry, Karnataka, Madhya Pradesh, Bihar, and Rajasthan (with comprehensive CGD policies) have taken steps in this direction.
These states account for more than 55 per cent of the country’s total population and approximately 60 per cent of its households.
PNGRB has assigned a minimum target of 7.85 crore out of the total 12.63 crore PNG connections, and 10,131 out of 18,336 CNG stations to be completed by 2034 in these States.
The policy is expected to have a significant impact on India’s energy consumption, economy, and environment.
“The states of Madhya Pradesh, Bihar, and Rajasthan together represent a population of nearly 29 crore and around 6 crore households. This policy will undoubtedly support the promotion and usage of clean fuel,” PNGRB said.
The high and differential VAT rates on natural gas across states pose a significant challenge to the uniform growth and affordability of the natural gas ecosystem in India, it has been asserted. These disparities create an uneven playing field, discouraging investment in states with higher tax rates and ultimately affecting the end-user prices for both domestic and commercial/industrial consumers.
While some states levy VAT as low as 5 per cent on natural gas, others impose rates exceeding 20 per cent, leading to substantial cost variations.
The selling price of Domestic PNG in the country varies from approximately Rs 45/SCM in Tripura to Rs 63/SCM in Uttarakhand.
Similarly, CNG price varies from approximately Rs 74.60/kg in Puducherry to Rs 103.80/kg in Uttarakhand.
“Rationalising VAT across states is critical to fostering a stable, competitive, and inclusive natural gas market, which is essential for accelerating India’s clean energy transition and ensuring affordable access to sustainable fuel for consumers in all the regions,” the Board asserted. (ANI)
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