India’s city gas distribution (CGD) sector has witnessed notable expansion over the years, driven by supportive government policies and rising demand. The Petroleum and Natural Gas Regulatory Board (PNGRB) has authorised 307 geographical areas (GAs) for the development of CGD networks, covering nearly the entire mainland of the country. As of February 2026, India has achieved over 16.47 million domestic piped natural gas (PNG) connections and has established over 8,000 compressed natural gas (CNG) stations. The sector is also the second largest consumer of natural gas in the country, accounting for over 20 per cent of total consumption. The government aims to raise the share of natural gas in the overall energy mix to 15 per cent by 2030 and the CGD sector is expected to play a pivotal role in this transition. Moreover, current global uncertainties and India’s heavy reliance on imports to meet its energy requirements have further brought the segment into the spotlight. At a recent India Infrastructure conference, A.K. Tiwari, Member, PNGRB, talked about the key regulatory interventions in the sector and their impact, policy priorities and measures being taken to strengthen the CGD sector in India. He also highlighted the growing need for domestic gas optimisation. Edited excerpts…
How would you assess India’s current approach in balancing energy resource allocation?
India remains heavily dependent on the global market for its energy needs, currently importing a notable share of the crude oil, liquified natural gas (LNG) and liquified petroleum gas (LPG) requirements. This dependence underscores the extent of the country’s reliance on global supply, with ongoing geopolitical crises prompting a renewed focus on more effectively utilising domestic resources. India has a diverse energy base, including coal, renewables, natural gas and the potential for compressed biogas (CBG). However, its integration remains suboptimal, highlighting a missed opportunity to harness these resources in a balanced manner. Moreover, current distribution remains mismatched with regional resource availability, leading to inefficiencies. This reflects a broader imbalance between resource availability and utilisation.
Hence, a key strategic shift for India’s CGD sector would be to prioritise domestic energy sources and better align them with consumption patterns. Increased reliance on local resources can reduce exposure to global disruptions and improve overall efficiency. Further, prioritising domestic resources would not only strengthen energy security but also contribute to long-term economic stability. Moreover, rationalising deployment based on local conditions, along with the adoption of a more region-sensitive approach, is essential to ensure a more balanced and efficient system. Achieving these objectives will require a multi-pronged strategy, including infrastructure expansion and other measures.
The diversification of energy sources will be central to building a more resilient and future-ready energy system in India. Emerging options such as coal bed methane, waste-to-energy solutions and hydrogen blending are increasingly becoming essential complements to conventional fuels.
What has been the impact of some of the key regulatory developments on the sector? What new regulatory measures are being undertaken/planned?
Regulatory interventions have begun to ease structural constraints in the CGD sector through measures aimed at rationalising tariffs, reducing permission-related costs and simplifying approval processes. These reforms are gradually improving the ease of doing business and creating a more conducive environment for infrastructure investment.
Moreover, various measures have been implemented by the regulator and the government for effective communication between different departments and ministries, time-bound approvals etc. It also includes the ongoing PNG drive 2.0 and initiatives such as the waiver of imbalance charges, expedited connections to hospitals, hotels, hostels and canteens, and directives to state governments. These control orders will contribute to a bright future for CGD in India, providing an optimistic outlook amid the ongoing crisis.
Further, the PNGRB is working towards two regulations, including revisions to the bidding criteria for existing pipelines and the introduction of mutually agreed tariff reforms, as seen in several countries globally. Mutually agreed tariff reforms are likely to enhance pipeline access to CGD entities and facilitate infrastructure development.
Efforts are also underway to reduce the cost to CGD companies, including VAT, compression charges, transportation charges and working charges, along with tariff reforms. This will help create a level-playing field. In situations of crises, collaborative efforts, supported by a level-playing field, would attract greater participation in infrastructure development.
The sector is transitioning to a more collaborative growth model. Stakeholders are also recognising the benefits of shared infrastructure, joint initiatives and collective problem-solving. Strengthening these mechanisms will be critical to building a more integrated, resilient and scalable CGD ecosystem capable of meeting rising energy demand.
What are the key challenges in expanding pipeline infrastructure?
The expansion of pipeline infrastructure remains central to the success of India’s CGD network. However, the current progress indicates a significant implementation gap. While the total target for domestic PNG connections stands at over 125 million on a pan-India basis, actual household connectivity has reached only about 17 million. Of these, billed connections stand at approximately 12 million.
This divergence between targets and execution highlights the need for a more coordinated and accelerated approach to pipeline infrastructure development. Achieving the envisaged scale by the early 2030s will require sustained and concerted efforts across regulators, policymakers and CGD entities.
What is the status of CBG adoption in India? What are the emerging opportunities?
CBG represents a promising yet underdeveloped component of India’s evolving energy mix, reflecting a gap between policy ambition and on-ground realisation. While nearly 5,000 CBG plants have been envisaged, only about 1,200-1,300 are under construction and a mere 200 are operational.
Despite these constraints, the integration of CBG into the CGD network presents a compelling multi-dimensional opportunity. Blending domestically produced biogas with PNG can partially meet household energy demand, reduce reliance on imported fuels and enhance supply security. Such integration can also improve the viability of CGD networks by diversifying their fuel base.
Moreover, CBG offers significant developmental benefits. It can generate stable rural income streams through the monetisation of agricultural and organic waste, while simultaneously addressing waste management challenges. Furthermore, the production of organic fertilisers as a by-product strengthens agricultural sustainability by reducing dependence on chemical inputs. Taken together, CBG holds the potential to create a more circular, resilient and locally anchored energy-agriculture ecosystem.
CBG is hence expected to find a well-integrated role in the energy ecosystem. In this direction, both the government and the PNGRB are implementing various regulatory and tariff reforms to support its development and adoption.
What is the role of energy storage in supporting India’s energy security? What is the current status?
Energy storage remains a relatively underdeveloped yet critical pillar of India’s energy ecosystem. In the absence of adequate storage capacity, short-term shocks can quickly translate into broader energy insecurity, particularly during periods of geopolitical or market instability. This highlights the need for a more robust buffer mechanism, with strategic reserves to ensure the continuity of supply during crises.
Expanding storage infrastructure will also enhance national energy security and strengthen resilience across the energy value chain. Therefore, a more integrated approach is required, wherein storage planning is incorporated within the broader energy policy. While some progress has been made in this regard, further efforts are needed to ensure that potential crisis situations can be effectively managed and addressed.
How would you assess the policy environment? What are the key priorities?
The policy environment has become more facilitative, backed by regulatory support measures such as control orders from the Ministry, expedited approvals, incentives for utilities to achieve their minimum work programme targets and rationalised permission charges. PNG has become a policy priority, with broader plans such as LPG-free urban centres gaining traction.
However, the translation of these policy enablers into on-ground pipeline expansion remains uneven. Expansion is constrained by pipeline gaps, execution delays and coordination issues. Addressing these gaps requires faster and efficient infrastructure development and a more synchronised, execution-focused approach across stakeholders to ensure a timely roll-out.
A critical focus area lies in prioritising pipeline connectivity within Tier 1 and Tier 2 cities, where population density and existing infrastructure provide a strong foundation and opportunity for rapid scale-up. Accelerating PNG connections in these regions could potentially replace nearly 40 million LPG connections, thereby reducing import dependence and enabling more efficient allocation of LPG for commercial and industrial usage. This would require a focused strategy that prioritises these regions, supported by time-bound approvals, and allocation of LPG to the commercial and industrial sectors, among other measures.
The development of CNG station infrastructure must also be intensified to support both transport and industrial demand.
What is your outlook for the sector?
At a broader level, India’s energy transition has entered a decisive and complex phase that necessitates a careful balancing of immediate operational priorities with long-term strategic objectives. The CGD sector, anchored in domestic resource utilisation and reinforced by ongoing regulatory reforms, is well positioned to function as a critical bridge in this transition towards cleaner and more sustainable fuels.
Rising awareness and acceptance of cleaner energy alternatives are driving a steady increase in demand for gas-based solutions across segments. Meanwhile, domestic production levels remain broadly adequate to meet priority consumption needs, particularly in the household and transport sectors, which continue to drive demand.
The way forward for CGD lies in a more integrated, coordinated and execution-focused approach across stakeholders, combining policy stability with institutional efficiency and market-based incentives. A sustained focus on self-reliance, aligned with domestic capabilities and long-term objectives, will strengthen resilience, efficiency and adaptability.
