What began as a price shock on Saturday has, within 72 hours, morphed into a full-blown supply crisis. Across India, from the dhabas to star hotels and restaurants, commercial LPG cylinders are reportedly running out, and the hospitality industry is sounding the alarm.
Union Petroleum Minister Hardeep Singh Puri last night assured that there was "no shortage for domestic consumers and no reason to panic." However, he did note that "other industries continue to get 70-80 per cent of their supplies, despite the war situation." Ground reports suggest that the commercial LPG crisis has deepened in more parts of India.
The immediate cause is a government directive restructuring the priority order for domestically produced natural gas, pushing LPG production for households and essential sectors (hospitals, educational institutions and city gas networks) to the top, while commercial supply to hotels and restaurants has been deprioritised.
Oil marketing companies (OMCs) have simultaneously begun rationing commercial LPG supplies to prevent hoarding and black market diversion, including the introduction of a 25-day inter-booking period.
The Ministry of Petroleum and Natural Gas has constituted a three-member Executive Director committee of OMCs specifically to review supply representations from the hospitality sector.
On the ground, the impact is severe. In Vijayawada, distributors say they have received zero stock for days, where a report stated that one distributor reported 350 pending indents unmet and 200 new orders piling up daily. Hoteliers warned that Vijayawada's hotels could begin shutting down by Sunday if supplies do not resume.
In Mumbai, the Indian Hotels and Restaurants Association (AHAR) reported that at least 20 per cent of establishments had already temporarily closed. Chennai and Bengaluru hotel associations flagged their concerns on Tuesday.
Punjab and Haryana saw long queues even for domestic cylinders, with some commercial users allegedly being charged ₹2,500–₹3,000 per cylinder on the black market against the official price of ₹1,980.50. Himachal's hotel federation has written directly to Union Petroleum Minister Hardeep Singh Puri seeking priority allocation.
States are now taking matters into their own hands. Madhya Pradesh Chief Minister Mohan Yadav convened an emergency review meeting and formed a three-member ministerial committee, comprising Deputy CM Jagdish Devda, Food Minister Govind Singh Rajput and MSME Minister Chaitanya Kashya, to monitor petroleum product availability.
Chhattisgarh CM Vishnu Deo Sai issued a public reassurance that adequate LPG stocks exist while directing district officials to crack down on black marketing.
The Centre has also invoked the Essential Commodities Act (1955) to treat natural gas supply as a priority allocation at 100 per cent of the average six-month consumption baseline. The notification, published in the Gazette on Tuesday, has additionally ordered refineries to ramp up LPG production and redirect the additional output entirely to the domestic market.