LPG cylinder shortage sends India into panic mode

Amit Kumar Singh is losing his patience. The Gurugram resident booked his gas cylinder with his Indane agency Santosh a week ago, but has yet to get the gas cylinder. This, even though the booking system shows a delivery personnel having been assigned. “Please help, it is urgent,” he pleaded in a message sent to authorities.

Ironically, Amit is not alone. The Iran war has just crashed through into Indian homes, and threatens to snuff out their kitchen fires. But before it does that, it could just extinguish India’s vibrant eat-out scene.

This is because, with the government invoking the Essential Commodities Act by prioritising homes, hospitals and schools for the LPG cylinder delivery and putting commercial establishments on the back burner (pun not intended), it is crisis mode across the nation’s hotels and restaurants.

Many of them have either trimmed down their menu, cutting out foods that need longer preparation time on the stove, or have outright changed their menu to include cold items — like Delhi High Court’s Lawyer’s Canteen, which is now serving only sandwiches due to the cooking gas crunch.

An advisory sent out by the National Restaurant Association of India (NRAI) on Tuesday night advised members across the country to immediately adopt conservation measures, including trimming menus by suspending dishes that need longer cooking time, using pressure cooking where possible and organisational efficiency measures like adopting a central kitchen, adopting induction cooking and electric fryers, etc.

“The restaurant industry supports millions of livelihoods, from chefs and service staff to farmers and suppliers,” said Sagar Daryani, president of NRAI, “If the situation escalates further and availability tightens significantly, the restaurant industry may face serious operational challenges.”

Although the Indian government claims that there are enough reserve stocks, confusion in the market is visible on the ground. One problem could be hoarding and black marketing, as well as the stampede of people trying to reserve and get one before a paucity actually hits. One reason why UP state officials conducted raids across cities like Lucknow, Prayagraj, Kanpur and Noida.

Black marketing of LPG cylinders seems to be already rife. A commercial cylinder that normally costs around ₹1,600 is now being sold for nearly ₹3,000 in Mumbai, according to office bearers of the Association of Hotels and Restaurants. In one instance, a hotel owner has reportedly paid ₹6,000 for a cylinder in Andheri. Nearly 15,000 small and medium eateries may shut shop in the next three to four days if supplies do not improve. While 35 per cent of hotels use piped gas, the rest rely on LPG and will be hit first.

There are more than 10,000 hotels, small eateries, tea shops and establishments in Chennai which consume at least five commercial cylinders per outlet every day. M. Ravi, president of the Chennai hotel owners association, says, “We do not have any other option as of now, but to shut down. We cannot afford to run the eateries without the supply of LPG cylinders."

Popular hotels in Chennai, like Adyar Ananda Bhavan and Sangeetha, displayed boards outside the restaurants saying they have LPG only for the next two weeks and also the temporary change in their menu. 

Prices of auto LPG used by autorickshaws in Hyderabad have also surged sharply, rising from 53 to 96 per kg, triggering long queues of vehicles at fuel stations across the city.

J. Ajay Kumar, an autorickshaw driver, said the rush is driven largely by fears of supply disruptions. “There are speculations that supplies may be affected. Drivers were told that gas may still arrive, but there could be gap periods, and prices could rise further. That is why many of us are queuing up,” he said.

Debaditya Chaudhury, Managing Director of restaurants like Chowman, Oudh 1590 and Chapter 2 in West Bengal, says the situation appears to be worsening in metro cities. “Like many others across pan-India markets, we too are beginning to feel the pressure of inconsistent commercial gas supply. If the situation escalates further, we may have to consider temporary measures such as restricting menus to manage kitchen operations efficiently. We have already held a series of internal meetings and are preparing precautionary steps.”

To make matters worse, reports of the IVRS system used for booking gas have developed snags in many towns. The result? Frustrated denizens come out to queue up outside Gas Agencies, increasing the chances of bribing and profiteering by overcharging.

The basic issue is that India imports more than 60 per cent of its LPG requirements from abroad. Except for one state-run supplier from Algeria in Africa, almost all of it comes from three Gulf states — Qatar, Saudi Arabia and the UAE. And all three send them from their ports within the Strait of Hormuz, the same one that Iran has now blockaded. 

Logically, it is too soon for India to face a shortage, as it always happens, the shortage is more man-made, a combination of public panic, shrewd hoarding and profiteering. But if the disruption in the Strait of Hormuz persists, industry players say the ripple effects could soon spread beyond restaurants and transport, impacting a wide range of urban services dependent on LPG.

[With inputs from Dnyanesh Jathar, Lakshmi Subramanian, K. Vijaya Bhaskara Reddy, Prema Rajaram and Badar Bashir]