Govt sets up panel as LPG crisis hits hotels, restaurants in Mumbai, Bengaluru

THE hospitality and restaurants sector in India is grappling with a growing shortage of commercial liquid petroleum gas (LPG) supply, as the government has taken steps to temporarily limit cooking gas cylinders to high-priority sectors such as education and hospitals.

Restaurants in major cities such as Bengaluru, Delhi, Hyderabad and Mumbai are warning that operations could be disrupted if supplies do not stabilise soon.

Industry groups say eateries depend on frequent LPG deliveries and typically do not maintain large reserves, forcing some establishments to cut menus, reduce operating hours or consider temporary closures.

Further, with LPG supplies now temporarily restricted, food delivery platforms such as Swiggy and Zomato may also see some impact as restaurants recalibrate services after taking stock of their existing supplies, according to a Moneycontrol report.

What steps is government taking amid LPG, oil shortage?

Government officials said several steps have been taken to prevent hoarding and stabilise supply.
The LPG booking interval has been extended from 21 to 25 days.

Refineries have been instructed to increase LPG production.

Authorities have also directed oil marketing companies (OMCs) to prioritise domestic LPG connections over commercial users, emphasising that household consumers will remain the top priority.

The oil ministry has constituted a three-member committee comprising OMC executive directors to review requests for LPG supply from restaurants, hotels and other non-domestic sectors.

Why is LPG supply hit?

India consumes about 31.3 million tonnes of LPG annually, with around 62% imported. Much of these imports normally move through the Strait of Hormuz, where disruptions linked to the conflict in West Asia have tightened supplies.

Iran has restricted use of the strategic waterway amid attacks from the United States and Israel. The chokepoint handles about 20 mbpd of oil — around one-fifth of global consumption — and around one-fifth of global LNG trade, mainly from Qatar.

Meanwhile, Gulf oil producers have started cutting output amid disrupted shipping in the region. Over the weekend, Iraq reduced production at its main southern oilfields by 70% to 1.3 million barrels per day, while Kuwait Petroleum Corporation also began lowering output and declared force majeure.

Asian countries are especially feeling the hit as reserve become tight. Officials say India is exploring additional LPG supply partnerships with Algeria, Australia, Canada and Norway to ease the pressure on domestic markets.