Restaurants And Hotels Likely To Shutdown Amid LPG Supply Crunch Due To Iran War

The ongoing conflict in West Asia is beginning to affect India's energy supply chain, with disruptions in liquefied petroleum gas (LPG) imports creating shortages in several parts of the country.

Authorities have moved to prioritise household cooking gas supply, while distribution of commercial LPG cylinders used by restaurants, hotels and food outlets has been reduced in many regions.

The tightening supply has already pushed up prices and created concerns among businesses that rely heavily on commercial gas cylinders for daily operations.

LPG Prices Rise Amid Supply Pressure

The supply disruption has already led to an increase in LPG prices.

• The 19-kg commercial LPG cylinder has reportedly become costlier by around ₹115.
• The 14.2-kg domestic LPG cylinder has seen a price rise of roughly ₹60 since March 7.

The increase reflects the growing pressure on imports as global energy markets face instability due to military tensions in the Middle East.

Commercial LPG Supply Reduced in Many States

Reports from several states-including Punjab, Karnataka, Maharashtra, Andhra Pradesh, Telangana and Tamil Nadu-suggest that oil marketing companies have either reduced or temporarily halted the supply of commercial LPG cylinders.

Bengaluru Hotels Association says that they won't be able to operate their restaurants starting tomorrow due to a shortage of commercial cooking gas. The supply of gas has almost completely stopped because of the ongoing war in West Asia.

The move is aimed at ensuring that domestic households continue receiving cooking gas without interruption.

However, this decision has created serious difficulties for restaurants and food businesses that rely on the 19-kg commercial cylinders for their kitchens.

In cities such as Mumbai and Pune, restaurant owners say they are already struggling to secure fresh supplies.

Some LPG distributors reported waiting for long hours at gas filling plants but returning without receiving any cylinders.

Restaurants Face Operational Challenges

Restaurant owners warn that the shortage could affect daily operations if the situation continues for several days.

Many eateries in Pune and other cities say they depend entirely on commercial LPG cylinders for cooking. With limited supply available, some restaurants have started reducing the number of dishes on their menus in order to conserve gas.

Hoteliers say prolonged shortages could force kitchens to operate at lower capacity or even temporarily shut down, which would affect both workers and customers who rely on the food service sector.

Industry representatives also worry that some businesses may attempt to purchase domestic LPG cylinders through illegal channels. Such practices are unsafe and against regulations.

Panic Buying and Longer Waiting Times

The uncertainty around supply has also triggered panic among domestic consumers.
In several cities, waiting times for LPG refills have reportedly increased from two days to as long as eight days.

To prevent hoarding and manage demand, oil companies have introduced stricter booking rules. Consumers can now request a new LPG refill only 21 to 25 days after receiving their previous cylinder, compared to shorter intervals earlier.

Dealers say the new rules have led to a surge in booking requests, putting pressure on online booking systems in some areas.

Shortage Affects Other Public Services

The LPG shortage has also impacted services beyond households and restaurants.
In Pune, the municipal corporation has temporarily shut down gas-based crematoriums due to restrictions on LPG components such as propane and butane.

Meanwhile, reports indicate that oil companies have asked petrol pump operators to make advance payments before purchasing fuel, reflecting broader uncertainty in the energy market.

Strait of Hormuz Disruptions Behind Supply Issues

The main reason behind the LPG supply disruption lies in the Strait of Hormuz, one of the world's most important maritime trade routes.

A significant portion of India's LPG imports passes through this narrow waterway. Ongoing military activity and tensions in the region have slowed shipments from key suppliers such as Qatar and Saudi Arabia.

Officials estimate that weekly LPG imports to India have dropped by nearly 30%, creating pressure on domestic supply chains.

Government Prioritises Household LPG Supply

To manage the situation, the government has invoked emergency provisions under the Essential Commodities framework.

Public sector oil companies-Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum-have been instructed to prioritise domestic LPG supply for households.
Officials say there is currently no immediate shortage of cooking gas for households, and they have urged consumers not to panic or engage in hoarding.

When Could Supply Normalise?

Experts say the duration of the shortage will depend largely on developments in the West Asia conflict and the global energy market.

Some countries in the G7 group are considering releasing emergency oil reserves to stabilise energy supply, though it may take time before such measures affect shipping and distribution.

Additional LPG shipments from countries such as Russia and Algeria may also help ease pressure in the coming weeks.