Cooking Gas Crisis: Restaurants Face Closure as LPG Shortage Grips India

Top Summary

• What happened: Hoteliers and restaurant associations across India are reporting a severe shortage of commercial LPG, threatening widespread closures.
• Why it matters: The restaurant industry, a ₹6.6-lakh-crore ecosystem and major employer, faces potentially catastrophic losses.
• What changes for people: Many restaurants are limiting services or shutting down, impacting consumers and potentially leading to food inflation.
• Who is affected: Restaurants, hotels, paying guest accommodations, hostels, textile processing factories, and consumers nationwide are affected.

Nationwide LPG Shortage Threatens Restaurant Industry

Hoteliers across India are sounding the alarm about a critical shortage of commercial cooking gas. The National Restaurant Association of India (NRAI) and other associations warn of potential shutdowns.

Disruptions are already being felt in Bengaluru, Mumbai, Delhi-NCR, and other regions.

Bengaluru Grapples with Immediate Impact

Bengaluru is experiencing significant disruptions. Some restaurants are limiting services to tea and coffee only.

The Bengaluru Hotels Association warned that establishments may be forced to halt food services if supply isn't restored.

On March 10th, many small restaurants limited service after gas dealers reported no refills since March 7th. Around 10-15% using piped gas from GAIL (India) Limited are unaffected.

Government Intervention Sought

Karnataka Chief Minister Siddaramaiah suspects the shortage is due to a March 9th order prioritizing domestic LPG.

He wrote to Union Petroleum Minister Hardeep Puri, requesting intervention to address the unintended consequences.

Tamil Nadu Chief Minister M.K. Stalin has also written to Prime Minister Narendra Modi, seeking alternative arrangements.

Mumbai Restaurants Face Imminent Closures

Around 20% of Mumbai hotels and restaurants have already shut down.

Associations project that nearly 50% will close within two days if the situation doesn't improve.

 

A representative of AHAR stated, "We understand the reason but instead of blanket stoppage, the supply should continue for at least 25%, so the hotels can survive somehow."

 

Delhi-NCR and Other Regions Affected

While larger Delhi-NCR restaurants have reserves, smaller outlets face supply issues and are forced to buy on the black market.

A kebab and biryani shop owner in New Delhi reported a surge in black market cylinder prices, reaching ₹1,400 to ₹1,500.

Industry Leaders Call for Action

Restaurateur Zorawar Kalra emphasizes the industry's dependence on commercial LPG.

 

"Restaurants cannot cook without fuel. Commercial LPG is the backbone of kitchen operations across India, and any disruption threatens the continuity of food service for millions," Kalra stated.

 

He urged the government to grant essential service status to the hotel industry and prioritize LPG supply.

Kalra estimates a ₹1,200-1,300 crore daily loss to the industry and economy due to supply disruptions.

Impact Spreads Beyond Restaurants

The shortage is affecting paying guest accommodations and hostels in Hyderabad, particularly in IT hubs.

Supply to some PG facilities has dropped drastically, by as much as 75%. Managers fear they will struggle to cook meals.

In Coimbatore, Sree Annapoorna Sree Gowrishankar Group is limiting its menu and hours.

Durai Palanisamy of Southern India Mills Association warns that textile processing factories, which use LPG for singeing, will come to a standstill.

State Governments Respond

Madhya Pradesh is forming a three-member committee to monitor the supply of essential items.

Punjab's hospitality sector is experiencing anxiety during the wedding season.

Chhattisgarh has instructed officials to ensure smooth supply and crack down on black marketing.

Andhra Pradesh Civil Supplies Minister Nadendla Manohar clarified that there is no shortage of LPG in the State.

Disparities in Supply Across States

In Bhopal, commercial LPG cylinders have not been supplied by oil companies since March 9th, prioritizing hospitals and educational institutions.

Consumers in Uttar Pradesh and Bihar are queuing outside LPG distribution centers amid shortage rumors.

 

Pramod Kumar, owner of restaurant Tandooriwala in Patna, said: "The shortage has badly affected our business. For the time being, we have started cooking on coal and induction stove to meet the demands."

 

Associations Advocate for Solutions

The Hotel and Restaurant Association of Odisha (HRAO) has urged the Union Minister for Petroleum and Natural Gas to restore uninterrupted LPG supply.

What to Watch Next

The industry awaits government intervention and policy clarity to address the LPG shortage. The formation of committees and prioritization of supply will be key indicators of future stability and could determine the fate of many businesses in the hospitality sector.