With state-run oil marketing companies (OMCs) losing an estimated ₹690 on every domestic LPG cylinder sold — translating into nearly ₹1.38 lakh crore annually — the Centre has launched a nationwide push to shift households from LPG to piped natural gas (PNG) in areas where city gas infrastructure is already available.

In a letter to chief secretaries of all states and union territories, Petroleum Secretary Neeraj Mittal said recent developments in the Strait of Hormuz region have necessitated accelerated measures to reduce dependence on LPG and promote PNG as an alternative cooking fuel.

The government is also bearing an additional ₹19,000 crore annual subsidy burden under the Pradhan Mantri Ujjwala Yojana (PMUY), under which beneficiaries receive ₹300 per cylinder subsidy.

“OMCs are currently facing a loss of Rs 690/cylinder of LPG, which translates to around loss of Rs 1,38,000 crore per annum. Apart from this, Government provides Rs 300/cylinder subsidy to PMUY households which is an additional subsidy of Rs 19,000 crore per annum,” Mittal wrote.

“Therefore, there is urgent need to use alternative fuels, including PNG, which is also cleaner and more user friendly,” he added.

Context of governments’ latest move

The move comes weeks after the government tightened rules for consumers shifting to PNG. On May 25, the petroleum ministry barred households with PNG connections from refilling LPG cylinders and mandated that consumers migrating to PNG surrender their LPG connection or obtain a transfer voucher within 30 days for future use in locations where PNG is unavailable. 

Earlier in March, PNG consumers had been asked to give up LPG connections within three months.

The ministry has now sought the involvement of state administrations to accelerate migration, saying existing efforts have yielded limited results.

Mittal said that despite notices being issued to consumers who already have domestic PNG connections to surrender their LPG connections, “field experience indicates that access constraints, consumer non-responsiveness and local issues have limited the effectiveness” of the exercise, adversely affecting the pace of PNG adoption.

“It is felt that active involvement of the district and urban body administration will improve the outcome of ongoing efforts of the government in expanding PNG network,” the letter said.

The petroleum secretary requested states to direct district collectors, district magistrates, commissioners and urban local bodies to work with state-level coordinators and city gas distribution (CGD) entities to facilitate consumer migration.

“I, therefore, request that instructions may be issued to district collectors/district magistrates/commissioner/special officers of urban bodies to collaborate with respective state level coordinators/CGD entities to nudge and urge LPG consumers to fully migrate to PNG, wherever available,” Mittal said.

According to the petroleum ministry, since March 2026, about 9.16 lakh PNG connections have been gasified and infrastructure has been created for an additional 3.05 lakh connections, taking the total to 12.21 lakh connections. A further 9.24 lakh customers have been registered for new PNG connections.