India’s hospitality sector is bracing for widespread disruptions and potential shutdowns as a critical shortage of cooking gas grips the nation.
Restaurants and hotels across the country are facing dwindling supplies, a direct consequence of the ongoing conflict in Iran.
The scarcity of liquefied petroleum gas (LPG) stems from the US-Israel war on Iran, which has severely impacted ship traffic in the Gulf and the vital Strait of Hormuz.
This disruption has sent energy prices soaring and increased transport costs, affecting major Gulf producers like Qatar and Saudi Arabia.
As the world’s second-largest importer of LPG, India last week invoked emergency powers, compelling domestic refiners to boost production for local consumption. However, this measure has left the hospitality industry struggling to secure adequate supplies.
“We have LPG stock for two days. We are working on contingencies,” stated Bert Mueller, founder of the Mexican food chain California Burrito, which operates over 100 outlets from Bengaluru to Delhi.
He added, “We are conserving gas and installing induction stoves at certain stores.”
In response to the crisis, authorities have established a panel to review requests from the affected industries, as businesses grapple with the immediate threat of operational halts.
India’s oil ministry said it had set up a panel to review requests for LPG supply to restaurants and other industries, following appeals from two industry bodies.
“The restaurant industry is predominantly dependent on commercial LPG for its operations,” the National Restaurant Association of India, which represents more than half a million restaurants, told the food processing ministry on Monday.
“Any disruption therein will lead to a catastrophic closure,” the NRAI said in a letter, while another body, the Federation of Hotel & Restaurant Associations of India, also sought government help.
Indian companies have raised LPG prices for the first time in about a year, as the war boosts prices of the imports that fill two-thirds of annual LPG consumption.
India’s largest supplier of LNG, Qatar, halted production last week after Iran’s strikes on Gulf countries in retaliation for Israeli and US strikes against it.
Falling supplies
In the southern tech hub of Bengaluru dubbed India’s Silicon Valley, several restaurants said deliveries had dropped sharply, warning that kitchens will come to a halt if the situation is not resolved.
“One of our restaurants did not receive gas cylinders today,” Manish V Shetty, who runs the Udupi Food Hub chain of restaurants in Bengaluru told Reuters.
“Thankfully, one of our older vendors helped us,” he added, because the chain offers immediate payment, rather than credit terms of a week or month. “We’re also seeing a spike in the price of the sunflower oil that we use for cooking.”
Few restaurants stockpile LPG cylinders, because of safety concerns, relying instead on frequent replacement, said Veerendra Kamat, secretary of the Bengaluru Hotels Association.
“It’s a very grave situation. Most of the (gas) companies have stopped supplying,” said Ananth Narayan of the NRAI’s Bengaluru branch, adding that even those restaurants that do store gas could run out within a week or two.
