India’s food service sector faces a growing LPG crisis as a shortage of commercial LPG cylinders disrupts restaurant operations. Hotels and eateries across several cities have started cutting menus and reducing kitchen services.
The shortage affects cities such as Bengaluru, Chennai, Mumbai and Kolkata. Restaurants in these cities depend heavily on 19-kg commercial LPG cylinders for daily cooking.
In Bengaluru, the Bangalore Hotels Association warned on March 9 that many hotels may stop kitchen operations. Restaurant owners say oil companies had promised stable gas supply for 70 days. However, supply stopped suddenly.
Some eateries in the city have already scaled down operations. A few restaurants now serve only tea and coffee because they cannot run full kitchens without LPG.
Strait of Hormuz disruption triggers supply shock
The LPG shortage links directly to rising tensions in the Middle East. The ongoing US-Israel conflict with Iran has disrupted energy shipments.
Iran has effectively closed the Strait of Hormuz, a key global energy shipping route. This move has slowed LPG cargo shipments from the Gulf.
India imports nearly 60% of its LPG from Gulf suppliers such as Saudi Arabia and Qatar. Any disruption in this route quickly affects supplies. India consumes about 31.3 million tonnes of LPG every year from which around 87% goes to households, while the rest serves commercial kitchens.
Although the commercial share is smaller, it supports millions of affordable meals every day.
LPG price hike adds more pressure
The supply crisis comes days after a fresh LPG price hike. On March 7, 2026, the government increased domestic LPG cylinder prices by ₹60. Commercial LPG cylinder prices rose by ₹115.
The price of a 19-kg commercial cylinder now stands at:
- ₹1,883 in Delhi
- ₹2,043.50 in Chennai
- Around ₹1,950 in Bengaluru
Commercial LPG prices have already risen by more than ₹300 in 2026. Restaurants with tight margins now face both higher prices and limited supply.
Hotels face closure risk
Industry groups say the crisis has already affected thousands of businesses. The Hotel Owners Association of Mumbai estimates that about 8,000 hotels and restaurants face supply disruptions.
Nearly 20% of them have already shut operations, according to the association. If supply does not improve soon, 4,000–5,000 more hotels could close temporarily.
Distributors in Bengaluru say they hold stocks for only a few days. However, they have stopped new deliveries because oil companies have not refilled commercial cylinders.
Reports also indicate black-market sales of cylinders, with prices reaching ₹3,000 per cylinder in some areas.
Government announces emergency measures
The Ministry of Petroleum and Natural Gas says it has taken steps to stabilize supply. Authorities have asked refineries to increase LPG production. Refineries have also diverted additional LPG for domestic consumption.
The government has prioritized LPG supply for households, hospitals, and educational institutions to ensure essential services continue without disruption. Officials have also introduced a 25-day inter-booking rule to curb hoarding and black marketing of cylinders.
In addition, a committee of executives from oil marketing companies will review concerns raised by the hospitality sector, while the government has invoked provisions of the Essential Commodities Act, 1955 to maintain energy supply during the ongoing crisis.
Political reaction to LPG price hike
The LPG price increase has also triggered political reactions. Karnataka Chief Minister Siddaramaiah criticised the price hike. He said the ₹115 increase in commercial cylinders has already burdened businesses.
Several leaders also questioned the timing of the announcement on International Women’s Day.
The crisis highlights India’s heavy dependence on energy imports. Nearly 60% of India’s LPG supply comes from the Gulf region. Disruptions in the Strait of Hormuz can quickly affect domestic supply.
Restaurants and small eateries now stand at the front line of the crisis. If supplies do not stabilize soon, many kitchens may remain closed for longer. Millions of people who depend on affordable cooked food could feel the impact.
[Prateeksha Thakur] is a seasoned journalist known for [her] sharp analysis and clear communication. At Newsisland, [she] focus on political reporting, offering readers a nuanced understanding of complex issues.
