Mumbai Hotels Hit by LPG Cylinder Shortage: Association Warns of Potential Closure of Half of Establishments

Mumbai Hotel Association Warns of Potential Shutdowns Due to LPG Supply Issues

Key Statistics:

• 20% of Mumbai's hotels have shut down due to gas supply issues
• Up to 50% of hotels in Mumbai could shut down over the next two days if the situation continues
• 31.3 million tonnes of LPG are consumed annually in India
• 87% of LPG is used in the domestic sector for household kitchens
• 62% of India's LPG requirement is met through imports

Industry Impact:

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The Mumbai hotel association, AHAR, has warned that up to 50% of hotels in the city could shut down over the next two days due to a disruption in gas supply. The association has clarified that no official decision has been taken to shut hotels, and the decision to remain open or close will depend on individual hotel owners.

Supply Chain Disruption:

The widening conflict in the Middle East has disrupted fuel supply chains, including India's LPG imports. The government has prioritized cooking gas supplies for households, triggering a supply crunch for hotels and restaurants that rely on market-priced commercial LPG.

Government Response:

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The oil ministry has set up a committee to examine LPG supply issues and has directed refineries to maximize LPG production by diverting petrochemical streams. The ministry has also extended the LPG refill booking cycle to 25 days from 21 days to avoid hoarding and black marketing.

Industry Reaction:

Vijay Shetty, president of the India Hotels and Restaurant Association, has warned that the shortage is spreading rapidly and could soon paralyze the sector. Industry sources have reported that the disruption has already begun affecting operations in Mumbai and Bengaluru, where hotels and restaurants are struggling to secure cooking gas.