Hotels and restaurants in major Indian cities are facing a serious operational challenge due to a Commercial LPG Cylinder Shortage, which industry bodies say has emerged following supply disruptions linked to the ongoing Iran–Israel conflict. Hospitality associations in Bengaluru, Chennai, and Mumbai have warned that the shortage could severely affect hotel and restaurant operations.
Amid the growing Commercial LPG Cylinder Shortage, the Ministry of Petroleum and Natural Gas has directed oil refineries to increase LPG production and ensure supplies to essential sectors.
LPG Price Hike Adds to Industry Concerns
The situation has worsened after the government increased LPG prices last Saturday. Household cooking gas prices were raised by ₹60, while commercial LPG cylinders became ₹115 more expensive.
Industry leaders say the Commercial LPG Cylinder Shortage combined with the price hike is putting significant pressure on restaurants and food service businesses across the country.
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Bengaluru Hotels Warn of Possible Shutdown
The Bangalore Hotels Association stated that hotel and restaurant operations in Bengaluru could be affected from March 10 if gas supplies do not resume.
In a statement, the association said hotels depend heavily on LPG for cooking and daily operations. The sudden Commercial LPG Cylinder Shortage has come as a major shock because oil companies had earlier assured uninterrupted gas supply for nearly 70 days.
In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, Ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use.
The ministry has prioritised domestic LPG supply to…
— Ministry of Petroleum and Natural Gas #MoPNG (@PetroleumMin) March 9, 2026
Association president PC Rao said hotels will continue operating “till the last drop” to serve customers, including students, office workers, and medical professionals who depend on affordable meals from restaurants.
Chennai Hotels Seek Immediate Government Intervention
Hospitality industry representatives in Chennai have also raised concerns about the worsening Commercial LPG Cylinder Shortage.
In a letter to Narendra Modi, the city’s hotels association president M Ravi warned that disruptions in LPG supply could impact hospitals, IT parks, college hostels and travellers who depend on the food industry.
He emphasized that the hospitality sector works 24×7 and a prolonged Commercial LPG Cylinder Shortage could disrupt essential food services across Tamil Nadu.
Mumbai Restaurants Already Cutting Menus
The impact is already visible in Mumbai, where around 20% of hotels and restaurants have reportedly suspended operations due to the gas shortage.
Many popular eateries in areas such as Dadar, Andheri and Matunga have shortened their menus and stopped preparing slow-cooked dishes like Dal Makhani and Rava Dosa to conserve gas supplies.
Industry Bodies Flag Widespread Disruption
The Federation of Hotel and Restaurant Associations of India has written to Hardeep Singh Puri, warning of widespread disruption due to the Commercial LPG Cylinder Shortage.
FHRAI Secretary General Jaison Chacko said distributors are withholding LPG supplies citing a government order dated March 5, leading to confusion at the ground level.
Similarly, the National Restaurant Association of India has urged the government to intervene immediately, stating that suppliers are unable to meet the industry’s LPG demand.
Government Response on LPG Supply
Responding to the concerns, the Ministry of Petroleum and Natural Gas said oil refineries have been directed to increase LPG production. The government has also introduced a 25-day inter-booking period to prevent hoarding and black marketing.
Imported LPG supplies are currently being prioritised for essential sectors such as hospitals and educational institutions.
Union Petroleum Minister Hardeep Singh Puri recently said that India remains in a “comfortable position” in terms of energy supply and that there is “no room for anxiety.”
Despite the government’s assurances, industry groups warn that the Commercial LPG Cylinder Shortage is already affecting the hospitality sector across major cities. If supply disruptions continue, hotels and restaurants may face operational challenges, potentially impacting food services for millions of people in urban areas.