LPG Shortage Disrupts Indian Restaurant Industry, Raising Fears of Closures

A nationwide shortage of commercial Liquefied Petroleum Gas (LPG) is impacting restaurants across India, forcing establishments to curtail menus, seek alternative cooking methods, and in some cases, temporarily close their doors. The crisis, stemming from geopolitical developments and a shift in supply prioritization, threatens the stability of a vital sector of the Indian economy.

Supply Chain Disruptions and Government Response

The National Restaurant Association of India (NRAI) issued an advisory on March 10, 2026, urging members to reduce LPG consumption. This followed reports of disruptions in the commercial LPG supply chain, exacerbated by the ongoing conflict in West Asia The News Minute. The NRAI warned that a prolonged shortage could lead to “catastrophic closures” of restaurants across the country Hindustan Times.

The situation was further complicated by a March 5th order from the central government prioritizing LPG supply for domestic consumers, inadvertently impacting deliveries to commercial users Hindustan Times. The Ministry of Petroleum and Natural Gas has since formed a committee to review the supply shortages and is considering invoking the Essential Commodities Act to manage the crisis Business Standard.

Regional Impacts and Restaurant Responses

The LPG shortage is being felt acutely across various states:

• Bengaluru: Hotel operations are affected, with some small restaurants limiting services to tea and coffee due to a halt in commercial cylinder refills since March 7 Hindustan Times.
• Mumbai: Approximately 20% of hotels and restaurants have already closed, with projections indicating nearly 50% could shut down within two days if the situation doesn’t improve Business Standard.
• Delhi-NCR: Smaller restaurants are facing longer waiting periods and are being forced to purchase cylinders on the black market at inflated prices Moneycontrol.
• Karnataka: Chief Minister Siddaramaiah has written to the Union Petroleum Minister, suspecting the shortage is linked to the prioritization of domestic LPG supply.
• Tamil Nadu: Chief Minister M.K. Stalin has as well appealed to the Prime Minister for alternative arrangements to address the shortage.
• Kerala: The hospitality sector is bracing for significant impact, with caterers and hotels potentially facing closures.
• West Bengal: Restaurants in Kolkata are reporting a complete halt in commercial gas supply, and autorickshaw drivers are facing issues with CNG availability Moneycontrol.
• Rajasthan: Oil marketing companies have directed distributors to stop fresh bookings for commercial use.
• Gujarat: The state government has curtailed gas supply to industries by up to 50% to safeguard domestic LPG availability.

Restaurants are responding by:

• Prioritizing dishes requiring less gas or shorter cooking times.
• Temporarily scaling back menu items involving long simmering, deep frying, or multiple burners.
• Exploring electric or induction-based cooking equipment.
• Consolidating prep and cooking schedules to reduce gas usage during non-peak hours.
• Batch cooking to minimize multiple small cooking cycles.

Economic Impact and Future Outlook

Restaurateur Zorawar Kalra estimates that a single day’s lack of LPG supply could cost the industry and the economy between ₹1,200-1,300 crore, as 75% of the ecosystem relies on LPG Moneycontrol. The NRAI is requesting the government to grant essential services status to the hotel industry and prioritize commercial gas cylinder supply.

The situation remains fluid, with ongoing monitoring of supply chains and potential for further disruptions due to geopolitical tensions. The industry awaits government intervention to stabilize the LPG supply and prevent widespread closures.