Page 64 - Policy Economic Report -August 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

• VAT rationalisation: States are being encouraged to bring VAT on natural gas down to 5%,
making PNG more affordable for households; several States have already reduced VAT.

• National PNG Drive 2.0: A nationwide drive, including a portal for surrender of LPG cylinders,
household notices, awareness camps and conversion of LPG-using housing societies to PNG,
to help more families switch to piped gas.

• Unified PNG registration portal: A single-window digital platform is under development to
simplify and speed up the process of applying for and tracking new PNG connections.

The APM/NAPM Incentive Scheme for Promotion of Domestic PNG Connections is a major initiative
in this direction, further strengthening the Government's sustained efforts to expand household
access to clean, safe and affordable piped cooking gas across the country.

Scheme Structure

Under the Scheme, eligible CGD entities will be allocated an additional 200 SCM of domestically-
produced, lower-priced (APM) gas for every incremental billed Domestic PNG connection achieved
during the performance period, over and above the Threshold Level determined for the respective
Geographical Area (GA). The Scheme will be implemented over two Tranches spanning six months.
The additional gas allocation will substitute the costlier Liquefied Natural Gas (LNG) that CGD entities
currently procure for their Compressed Natural Gas (Transport) segment, thereby lowering their
overall gas-sourcing costs.

The resulting cost savings are expected to shorten the payback period for capital expenditure incurred
on D-PNG connections from around 10 years to approximately 3 years — giving CGD entities a strong
financial incentive to expand household PNG connectivity more rapidly, bringing the benefits of clean,
safe and affordable piped cooking gas to a larger number of Indian households in the months ahead.

5. Official Visit of Shri Hardeep Singh Puri, Minister for Petroleum and Natural Gas, to Mauritius

Union Minister for Petroleum and Natural Gas, Shri Hardeep Singh Puri, made an official visit to the
Republic of Mauritius from 20-21 August 2026.

On August 20, Minister called on His Excellency Dr. Navinchandra Ramgoolam, Prime Minister of
Mauritius. In their presence, India and Mauritius exchanged a Government-to-Government (G2G)
Memorandum of Understanding (MoU) for cooperation in Oil and Gas sector, alongside a long-term
Sales and Purchase agreement between Indian Oil Corporation Limited (IOCL) and the State Trading
Corporation (STC) of Mauritius for supply of petroleum products. Under the Agreement, IOCL will
supply the entire import requirement of Mauritius of Motor Spirit (MS), High Speed Diesel (HSD) and
Aviation Turbine Fuel (ATF).

The MoU on oil and gas cooperation institutionalises the longstanding energy partnership between
the two countries, covering petroleum products supply, training and capacity building for Mauritian

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