A growing shortage of commercial LPG cylinders is disrupting restaurants and hotels in cities including Mumbai, Bengaluru, and Chennai, raising concerns over a widening gas supply crisis. Hospitality associations have warned that eateries are struggling to procure commercial cylinders, forcing some establishments to shut operations temporarily.

Extent of disruption

In Mumbai, roughly 20% of hotels and restaurants have already suspended operations due to irregular LPG supply. According to the Federation of Hotel and Restaurant Association of India (FHRAI), up to 50% of eateries could close within the next two days if the shortage persists. Restaurants still operating have resorted to “menu rationing,” dropping slow-cooked dishes to conserve gas.

In Bengaluru and Chennai, hotel associations have sounded the alarm about possible closures. Many hotels are relying heavily on LPG for daily cooking operations, and disruptions threaten the provision of meals to students, hospital staff, and travellers dependent on these establishments.

Government response

The Ministry of Petroleum and Natural Gas has directed oil refineries to increase LPG production while prioritising domestic supply. To prevent hoarding, the government has introduced a mandatory 25-day inter-booking period for domestic cylinders. Hospitals and schools are being prioritised, and a committee has been formed to explore restoring supplies to the wider restaurant industry.

Officials maintain that India’s energy imports via non-Hormuz routes are in “full flow,” but local disruptions have left the hospitality sector struggling. FHRAI has alleged that distributors have withheld supplies following a misunderstood government directive issued on March 5.

Impact on the hospitality sector

Industry leaders have highlighted the severity of the crisis. PC Rao, president of the Bengaluru hotels’ association, said establishments intend to “function till the last drop,” but the lack of commercial fuel is making this nearly impossible. In Chennai, M Ravi, president of the city’s hotel association, petitioned Prime Minister Narendra Modi, emphasising that IT parks, hostels, and critical hospital contracts could be affected by the gas shortage.

Mumbai’s iconic food scene has already felt the impact, with restaurants in areas like Dadar and Matunga suspending operations entirely. Many others have been forced to simplify menus and limit gas-intensive cooking.

Market context

Global volatility has added pressure to the situation. Brent crude briefly surged past $100 per barrel before correcting to $92. While global oil fluctuations are closely monitored, restaurant owners in India are primarily focused on securing a steady supply of commercial LPG to maintain daily operations.