LPG shortage hits hotels, restaurants: How is the govt responding?

The government has constituted a committee of senior oil company executives to examine supply issues after the restaurant associations sounded alarm over shortage of commercial LPG cylinders.

The move comes as a widening conflict in the Middle East has disrupted fuel supply chains, affecting India’s LPG availability and forcing authorities to prioritise household cooking gas distribution.

The Ministry of Petroleum and Natural Gas said it has directed oil refineries to increase LPG production and divert additional output for domestic household consumption to ensure that kitchens in homes continue to receive uninterrupted supplies.

“In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, the ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use,” the ministry said in a post on X.

The government has also introduced a 25-day inter-booking period for domestic LPG cylinders, while imported LPG meant for non-domestic use is being prioritised for essential sectors such as hospitals and educational institutions.

However, the prioritisation of household supply has resulted in a crunch for market-priced commercial LPG cylinders used by restaurants, hotels and other businesses.

The ministry said a three-member committee comprising executive directors of oil marketing companies (OMCs) has been formed to review representations seeking LPG supply for restaurants, hotels and other industries.

The development follows complaints from industry bodies that supplies of commercial cylinders have been disrupted at the ground level.

The Federation of Hotel and Restaurant Associations of India (FHRAI) on Monday wrote to Petroleum and Natural Gas Minister Hardeep Singh Puri flagging “widespread disruption” in LPG supplies to eateries.

In its letter, FHRAI said several distributors were withholding commercial LPG cylinders citing a government order dated March 5.

“In light of these challenges, we request the government to issue a formal clarification confirming that no such restrictions apply to the hospitality and food service sectors. We further pray for a clear mandate to be issued to all oil marketing companies to ensure the seamless distribution of commercial cylinders,” FHRAI Secretary General Jaison Chacko said.

The National Restaurant Association of India (NRAI) also urged the government to intervene, saying suppliers were unable to meet the sector’s LPG demand despite reports suggesting there was no formal ban on supply.

“As per news articles, the government has clarified that there is no ban on supply of commercial LPG cylinders for the restaurant industry. However, the ground situation is different, with suppliers expressing inability to supply the same. This is severely impacting the restaurant industry and in turn supply of food as an essential service for citizens,” NRAI said in a post on X.

Hotel and restaurant operations in the city are likely to be affected starting March 10, following a sudden and total halt in the supply of commercial gas cylinders, the Bangalore Hotels Association said on Monday.

In a notice, the association said the supply of gas cylinders meant for commercial use had been halted from Tuesday, forcing hotels and restaurants to suspend operations as cooking would not be possible without fuel.

“The supply of gas cylinders for commercial use has been stopped from today. Since the hotel industry is classified as an essential service, common people, senior citizens, students and medical and other people who depend on it will face difficulties in their daily meals,” the association said.