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'Catastrophic closure': Restaurants in fear, govt prioritises home LPG supply as India faces West Asia war ripples
Cooking gas ‘shortage’: Panel of officials from Indian Oil, HPCL, BPCL to look into requests from non-essential commercial consumers, such as hotels
The central government has formed a grievance-redress committee and taken steps to ramp up supply of liquefied petroleum gas amid reports of shortage of commercial-use cylinders in several parts of India. This comes as the ongoing US-Iran conflict affects supply lines from West Asia.
The three-member panel comprises the executive directors of public-sector companies Indian Oil, Hindustan Petroleum and Bharat Petroleum Corporation Limited, sources told news agency ANI.
Live: Updates on US-Iran conflict
Hindustan Petroleum (HPCL) posted on its X handle: “In light of current geopolitical disruptions affecting global fuel supply, steps have been taken to enhance LPG production and prioritise its availability for domestic consumers and essential non-domestic sectors such as hospitals and educational institutions.”
As for the non-domestic sectors that are not earmarked “essential”, such as hotels and restaurants, HPCL said their requests will be reviewed by this committee “based on merit, necessity, and product availability”.
It also shared three email IDs where submissions can be made “for essential requirements from other sectors”: edlpg@bharatpetroleum.in, indanecareho@indianoil.in, and lpg.sbu.head@hpcl.in.
“Genuine requirement of restaurant associations' for commercial LPG will be met and this committee will also re-prioritise the supply as per the requirements,” the sources told ANI.
What reports, announcements say
Meanwhile, there were reports citing sources in India Today that domestic LPG production has “increased by 10% in the last few days”, though on-record confirmation was not yet available. "We were in crisis earlier but today we are not in any crisis of petroleum products," a source told India Today.
At the heart of the situation is the Strait of Hormuz, a sea pass that Iran is reported to have closed. But the government sources have said India is now sourcing 70% of its crude oil supply from non-Strait of Hormuz sources.
The government, they said, has not taken any decision to curb export of refined oil.
Oil minister Hardeep Singh Puri has in recent days said India has “enough buffer stock” of petro-products like LPG.
Meanwhile, the Union government has already invoked the Essential Commodities Act to ensure an uninterrupted supply of domestic cooking gas, directing refineries and petrochemical units to maximise production of liquefied petroleum gas (LPG) and divert key hydrocarbon streams to the LPG pool.
The order under it sets some bars:
- Supply of natural gas to certain sectors is priority, and shall be maintained — subject to operational availability — to 100% of their average past six-month consumption. These sectors include domestic piped natural gas supply, and CNG for transport, besides pipeline operational requirements.
- Supply to fertiliser plants shall be 70% of their past six-month average gas consumption, again subject to operational availability. This is set at 80% for tea industries, manufacturing and other industrial consumers supplied through the National Gas Grid.
- As for city gas distribution, the outlets have been asked to ensure industrial and commercial consumers in their networks receive 80% of their past six-month average.
Union oil ministry says
Meanwhile, the Ministry of Petroleum and Natural Gas issued orders to refineries to increase LPG production, and directed that such additional output be channelled specifically for domestic use, it said in a post on X.
Already, the 21-day gap between two booking has been increased to 25 days “to avoid hoarding and prevent black marketing”, officials said.
Ground reports from states
In Maharashtra, though, minister Chhagan Bhujbal confirmed that hotels will face a cut in commercial LPG supply.
Bhujbal, the state's minister for food and civil supplies, said in a video message that several hotel owners met him and expressed concern over the situation arising out of constraints on supply of LPG.
"I personally met the chief minister (Devedra Fadnavis) and discussed the situation. There are clear instructions from the central government to all oil companies to prioritise domestic gas. Hence, in due course there will be a reduction in commercial gas supply," he said.
He said the impact will be felt particularly in Mumbai, which is the commercial capital of the country.
He said an option of using kerosene by eateries was suggested, but hotel owners raised safety concerns and pointed out that switching to the fuel would require a complete change in the existing system.
State revenue minister Chandrashekhar Bawankule warned of strict action against those hoarding LPG cylinders.
He also criticised the Congress, alleging that the Opposition party was attempting to create confusion among people over the gas supply issue.
Effects were felt in Kerala, too. A report Thiruvananthapuram by news agency PTI noted an acute shortage of LPG cylinders, and quoted industry sources as sayong that said gas distribution to commercial establishments like hotels has “almost come to a standstill”.
‘Had to switch to wood stove’
Hotels and restaurants in Kerala consume multiple LPG cylinders, even up to 15 a day, depending on their size and scale of operations, the sources said.
A busy, medium-scale hotel working round the clock in Kochi on Tuesday shifted their cooking partially to a traditional firewood stove due to the unexpected crisis.
"We cooked rice using the traditional firewood stove today. We could not close down the hotel all of a sudden as around 25 people are working here," it's owner said.
He said they usually use up to five cylinders a day and no more cylinders are in their reserve now.
A hotel owner in Kozhikode said they would be forced to close down the hotel if the LPG scarcity prolongs. "During the normal season, we need at least six cylinders daily. As it is the time of Ramadan fasting, we can manage with up to four cylinders. But, when we placed the order this morning, we were not getting even that number of cylinders," he said.
Officials of the Kerala Hotel and Restaurant Association (KHRA) said, “Indian Oil Corporation (IOC) informed us on Monday that the refilling of commercial cylinders has been stopped. But institutions coming under the essential service category, and households, will not be impacted, as per our knowledge.”
He said the association has already sent a memorandum to Prime Minister Narendra Modi, petroleum minister Hardeep Singh Puri, and CM Pinarayi Vijayan seeking immediate.
State civil supplies minister GR Anil said a meeting of industry stakeholders and officials concerned was convened. "Kerala is a consumer state and therefore we requested the Centre to extend a special consideration to the hotel industry in the state in the distribution of LPG cylinders," he said.
Scale of requirement
India consumes about 31.3 million tonnes of LPG annually. As much as 87% of this is in the domestic sector, that is, household kitchens; and the rest in commercial establishments such as hotels and restaurants.
As much as 62% demand is met through imports.
The US-Israeli attacks on Iran, and Tehran's retaliation, have shut the Strait of Hormuz, a key sea route through which India gets 85-90 per cent of its LPG imports from West Asian nations, including Saudi Arabia and Qatar.
Impact on bookings
Hotel associations in Bengaluru and Chennai have also flagged disruptions, warning that restaurants in the respective cities may be forced to halt operations on Tuesday, March 10, if the LPG supply was not restored.
The Chennai organisation said banquet bookings taken by hotels will be impacted, along with the supply of food to IT parks and college hostels.
The National Restaurants' Association of India (NRAI) also urged the government's intervention as it warned of “catastrophic closure” of businesses.
Restaurants in Gurugram and Mumbai also reported a shortage of commercial LPG.
“We have backup cylinders that can last about three days. If the situation continues, we may have to shift to residential cylinders or reduce menu items,” Rohit Arora, manager of a restaurant in Gurugram, told HT.
According to an NDTV report, eateries in areas like Dadar, Andheri, and Matunga have dropped slow-cooking items on their menus and shortened their operating hours in order to save on commerical LPG.
Meanwhile, the Pune Municipal Corporation (PMC) has temporarily closed the city’s gas crematoriums, directing that available propane and butane be prioritised for domestic LPG supply across the country.
The prices of LPG cylinders for commercial use was hiked by ₹115 and for domestic use by ₹60 last week.
Global issue: How US is responding
The US Chair of the Joint Chiefs of Staff, General Dan Caine was asked on Tuesday whether the American military is open to escorting vessels through the Strait of Hormuz.
Caine said he is “looking at a range of options to set the military conditions to be able to do that”.
US defence secretary Pete Hegseth referred to President Donald Trump's social media post threatening Iran against stopping the flow of oil through the shipping route. "He takes very seriously the condition of that strait," Hegseth said.
