Bengaluru, Chennai, Mumbai hotels face closure threat amid LPG shortage
What's the story
The hotel and restaurant industry in Bengaluru, Chennai, and Mumbai is facing a crisis due to a shortage of commercial cooking gas cylinders. The situation has been worsened by supply disruptions caused by the ongoing conflict in the Middle East. Household cooking gas prices have increased by ₹60, while commercial LPG cylinders have increased by ₹115. In response to this crisis, the central government, using emergency powers, has directed oil refineries to ramp up LPG production.
Industry impact
Bengaluru hotels will be shut
In Bengaluru, the Bangalore Hotels Association has warned that hotel and restaurant operations could be severely impacted from March 10. The association said, "Since the gas supply has stopped, the hotels will be closed from tomorrow." It added that the sudden stoppage of gas supply is a "big blow" to the hotel industry, as oil companies had assured uninterrupted supply for 70 days.
Urgent appeal
Situation critical in Chennai
In Chennai, the hotel industry is also reeling under the pressure of this crisis. The Chennai Hotel Association has said that commercial LPG distributors have stopped supplying cylinders completely. Its president M Ravi wrote to Prime Minister Narendra Modi, saying, "The situation has now become even more critical." He stressed that hospitals, IT parks, college hostels and travelers will be affected if the supply is hindered. "The short supply...will...hinder the dependence of the large public across Tamil Nadu," he said.
Operational challenges
Energy crisis in Mumbai
The hospitality sector in Mumbai is also reeling under an energy crisis, with around 20% of hotels and restaurants shutting down due to the LPG cylinder shortage. Iconic eateries in Dadar, Andheri and Matunga have started scaling back their menus, dropping slow-cooked food items. The Federation of Hotel and Restaurant Association of India (FHRAI) has flagged "widespread disruption at the ground level" to Petroleum Minister Hardeep Singh Puri.
Government response
Ministry orders refineries to ramp up production
On Monday, the Ministry of Petroleum & Natural Gas ordered oil refineries to produce more LPG and use it for domestic needs. It also imposed a 25-day inter-booking period to prevent hoarding and black marketing. The ministry said non-domestic supplies from imported LPG are being prioritized for essential sectors like hospitals and educational institutions. For other non-domestic sectors, including restaurants, hotels, "a committee of three EDs of OMCs has been constituted to review the representations for LPG supply," it said.
Public assurance
Energy imports are flowing smoothly: Puri
Last week, Minister Puri assured that India is in a "comfortable position" with no need for anxiety. He said energy imports are flowing smoothly through non-Hormuz routes. Oil prices have also seen a decline after hitting $100 a barrel due to geopolitical tensions. Brent futures fell $6.51 to $92.45 a barrel, while US West Texas Intermediate crude was down $6.12 to $88.65 per barrel.