When Britain's gas networks were first developed it was not thought to be "economically viable" to connect up some rural areas.
Steve Smith, senior partner for Local Grids at Ofgem, said: "Connecting more fuel poor customers to the gas mains gives them access to a cheaper energy source which also produces less carbon emissions than commonly used options such as bottled gas or heating oil."
The scheme will also provide financial assistance for those in underprivileged areas to pay for the connection, central heating and energy efficiency measures.
The National Housing Federation estimates that around seven million households in Britain are living in fuel poverty, which is defined as when more than ten per cent of income is spent on energy.
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