Shortage of fuel and cooking gas affect hotels and restaurants in India

Restaurants and hotels under strain all across the country

“The restaurant industry is predominantly dependent on commercial LPG for its operations,” the NRAI said, cautioning that any disruption could result in “catastrophic closure” for a majority of outlets.

The situation is already critical in several major cities. In Bengaluru, supply disruptions have left eateries struggling to operate, with some reducing services to tea and coffee only after commercial cylinder refills stalled for several days. Industry estimates suggest that only about 10–15% of establishments, those connected to piped gas networks—remain unaffected.

In Mumbai, the crisis has escalated further, with around 20% of hotels and restaurants already shut. Industry representatives warn that up to half of the city’s hospitality businesses could close within days if supplies are not restored. Smaller operators, which rely on multiple cylinders daily, are particularly vulnerable.

Delhi, India’s capital, presents a mixed picture. Larger restaurants have managed to continue operations using backup cylinder stocks, but smaller outlets report severe shortages and rising costs. Some have been forced to turn to the black market, where prices for commercial cylinders have surged from about $14.50 to as much as $18.00 in just a day, further squeezing margins already hit by food inflation.

Experts say that the industry—valued at approximately $80 billion—is facing unprecedented strain. A single day of disruption could cost the sector between $145 million and $160 million, given that roughly 75% of businesses depend on LPG. The hospitality sector asks the government to grant the hospitality sector “essential services” status and prioritize fuel allocation.

The shortage is not limited to restaurants. Paying guest accommodations and hostels, particularly in tech hubs like Hyderabad, are also struggling. Some operators report a 75% drop in LPG supply, receiving just a fraction of their usual cylinder orders, raising fears of meal disruptions for residents.

Across states, the situation remains fluid but increasingly severe. In Tamil Nadu, authorities have sought federal intervention to secure alternative supply arrangements. In Odisha and West Bengal, hotels warn they may run out of gas within days, while long queues have formed outside LPG distribution centers in Uttar Pradesh and Bihar amid panic buying.

In Kerala, caterers and hotels say they are operating on minimal supplies. Many warn they will be forced to shut down if the crisis persists. Similarly, in Rajasthan and Punjab, businesses are struggling to cope during peak wedding and tourism seasons, traditionally among the busiest times of the year, reports The Hindu.

Transport increasingly affected

Transport services are also feeling the strain. In cities such as Kolkata, autorickshaw drivers have been seen queuing for hours at compressed natural gas (CNG) stations amid supply constraints. Taxi and rickshaw operators across multiple regions report reduced earnings as fuel availability tightens and costs rise. Some drivers have cut back working hours or rationed fuel usage, further impacting urban mobility.

To address the situation, the Ministry of Petroleum and Natural Gas has set up a committee to review supply allocations for non-domestic sectors, while several states have initiated monitoring mechanisms and crackdowns on black marketing.

Despite these efforts, industry stakeholders warn that prolonged shortages could lead to permanent closures, job losses, and significant economic disruption. With supply chains still under pressure and geopolitical tensions unresolved, India’s hospitality and transport sectors remain on edge, bracing for continued uncertainty in the weeks ahead.