PNG connection: Gas discoms to be fined for missing targets

City gas companies may face penalties. The PNGRB is concerned about the slow pace of household connections. Many firms missed their PNG connection targets. Some achieved as little as 2% of their goals.

New Delhi: The PNGRB is set to penalise city gas distribution companies for falling significantly short of their targets-achieving, in some cases, as little as 2 per cent of cumulative goals-for connecting households with piped natural gas (PNG), according to people familiar with the matter.Companies that secured licences during the 9th, 10th, 11th and 11A bidding rounds-the four largest city gas licensing rounds-have especially underperformed on their home connection commitments. These companies had won licences based on number of households they pledged to connect each year.Data published by the Petroleum and Natural Gas Regulatory Board (PNGRB) shows that, on average, winners of these four rounds had achieved less than 12 per cent of their cumulative targets as of March 2025.Conducted from 2018 to 2022, these four rounds awarded two-thirds of India's city gas distribution licences, with a combined target of connecting 112.9 million households-about 90 per cent of the national goal of 126.3 million homes.These targets were staggered over multiple years, with cumulative target up to March 2025 set at 19.1 million connections. However, actual connections achieved stand at just 2.24 million - accounting for less than 12 per cent .

Major winners

IndianOil, BPCL, HPCL, Adani Total Gas, Think Gas, Torrent Gas, Indraprastha Gas and others were among the winners in these rounds, with some companies submitting aggressively high connection targets to secure licences.Considering all city gas licensing rounds to date, companies have achieved about 50 per cent of their cumulative household connection targets. Older licensees have performed better. Private firms are the weakest performers, achieving just 15 per cent of their cumulative targets as of March 2025.

State-run cos better

In contrast, state-run firms have achieved 35 per cent , while joint ventures involving state companies have exceeded their targets, reaching 128 per cent Some of these joint ventures have been operating for nearly two decades.In stark contrast to the lag in household connections, city gas companies have rapidly expanded compressed natural gas (CNG) infrastructure. They have commissioned 8,067 CNG stations across the country - 165 per cent of their cumulative targets up to March 2025."CNG is an extremely profitable business while connecting homes is difficult and offers thin margins," according to a city gas executive, who explained the gap in expansion between the two business segments.