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LPG Crisis Hits Restaurants Across India

A severe LPG crisis is unfolding across the restaurant industry in India, with many establishments forced to scale back their menus and rely on alternative cooking methods.

Impact on Restaurants

The crisis, triggered by the ongoing war in the Middle East, has led to a shortage of commercial LPG cylinders. Restaurants are struggling to procure cylinders, with some even turning to the black market. According to a senior staff member at Sanctum Hotel, the hotel is using charcoal and firewood to manage cooking, with around 350 guests across its 95 rooms and eight banquet halls.

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Menu Changes

Fuel-intensive items such as vada and masala dosa are among the first to be scaled back. Restaurants are replacing these items with staples like sandwiches and tandoor dishes, which require less gas consumption. For example, Vidyarthi Bhavan has shut down two out of four dosa tawas to reduce gas consumption, with dosas consuming the most gas.

Short-term Fixes

Restaurants are scrambling for short-term fixes, with some considering solar-powered or induction-based cooking systems. However, these alternatives require new vessels and electrical infrastructure, which can be expensive and challenging to implement. Nisarga Grand Hotel estimates that one cylinder costs around Rs 2,800-3,000 in the black market, compared to the official price of Rs 1,940 for a commercial 19-kg cylinder.

Read also: RBI Policy Preview: A Cautionary Wait Ahead

Government Intervention

The crisis has raised concerns about the impact on the hospitality industry, with over 1 crore people in Bengaluru dependent on hotels for food. SP Krishnaraj, owner of Nisarga Grand Hotel, has urged the government to step in and address the shortage.

Key Figures

  • Rs 1,940: Official price of a commercial 19-kg LPG cylinder
  • Rs 2,800-3,000: Estimated price of a commercial 19-kg LPG cylinder in the black market
  • 350: Number of guests at Sanctum Hotel
  • 95: Number of rooms at Sanctum Hotel
  • 8: Number of banquet halls at Sanctum Hotel
  • 1,800-2,000: Average number of dosas served by Vidyarthi Bhavan on a weekday

Investor Takeaway

The ongoing LPG crisis may impact the restaurant industry's menu offerings and operations in the short term.

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