Hotels and restaurants face closure due to LPG crisis; supplies suspended in Madhya Pradesh & many other states, Modi govt forms task force
The Ministry of Oil has formed a special committee to address the sudden shortage of commercial LPG gas. This shortage is causing a serious crisis in the hotel and restaurant industry.
The Ministry of Oil, in a statement on the social media platform X, stated that a committee of three executive directors from oil marketing companies has been formed. This committee will review matters related to LPG supply to restaurants, hotels, and other commercial establishments.
Commercial gas supplies have been temporarily suspended in Madhya Pradesh, Uttarakhand, Maharashtra, Punjab, Rajasthan, Chhattisgarh, Haryana, Karnataka, Telangana, and Andhra Pradesh, affecting the functioning of restaurants and restaurants in these states.
According to sources, the impact of supply disruptions is already visible in Mumbai and Bengaluru. Vijay Shetty, president of the India Hotels and Restaurants Association, says the shortage is spreading rapidly and could soon affect the entire sector.
20% of hotels and restaurants in Mumbai have shut down
Around 20% of hotels and restaurants in Mumbai have shut down so far due to disruptions in commercial LPG supply, the city’s hotel and restaurant association AHAR said on Tuesday.
The association warned that up to 50% of hotels in the city could shut down within the next two days if the gas supply situation does not improve.
According to AHAR, the number of restaurants that remain operational will depend on how much LPG stock individual establishments currently have available.
Industry organizations have warned that if supplies are not restored soon, eateries and restaurants could close within days.
The escalating conflict in the Middle East and the closure of the Strait of Hormuz have affected 85-90% of India's LPG imports from countries like Saudi Arabia. Consequently, the government has prioritized domestic cooking gas supplies, exacerbating the shortage of commercial gas for hotels and restaurants.
Govt implements Essential Commodities Act to regulate the supply of natural gas
The central government has implemented the Essential Commodities Act, 1955, to regulate the supply of natural gas in the country. Most LPG shipments to India come through the Strait of Hormuz. This route has been blocked due to the war, disrupting supplies. The government implemented this regulation in response to these disruptions.
India consumes approximately 31.3 million tons of LPG annually. Of this, 87% is used in domestic kitchens and 13% in commercial establishments such as hotels and restaurants. 62% of the total demand is met through imports.
The Ministry of Oil has directed refineries to increase LPG production by reducing petrochemical production. The booking period for domestic gas cylinders has been extended from 21 days to 25 days to prevent hoarding and black marketing. Imported LPG is being prioritized for essential non-domestic sectors, such as hospitals and educational institutions.