India’s commercial LPG (liquefied petroleum gas) cylinder prices have surged to record highs, significantly raising operating costs for businesses that rely heavily on the fuel. On Friday, the government has announced that the commercial LPG users across India will face a sharp rise in costs as prices of 19 kg cylinders have been increased by Rs 993, effective May 1. The sharp increase is already cascading through sectors such as food services, hospitality, catering, and small enterprises, with visible impact on consumer prices and demand.
In Delhi, the revised price now stands at Rs 3,071.50 per cylinder, marking a significant jump that is expected to impact restaurants, hotels, and small businesses the most. The price revision applies only to commercial LPG cylinders. Domestic cooking gas consumers have been spared from this hike, offering some relief to households already dealing with rising living costs.
With the hike in commercial LPG prices, restaurants, dhabas, and cloud kitchens are among the hardest hit, as LPG forms a core input for daily operations. There have been reports suggesting that many operators have begun increasing menu prices or reducing portion sizes to protect margins.
Crisis has mounted for the smaller eateries and street vendors. They are facing a tougher choice between absorbing losses or passing on costs, risking a drop in footfall. Some of them have even resorted to closing their shops for a specific period of time.
The hospitality sector is also facing the heat with the hotels witnessing higher kitchen and service costs, which are gradually being reflected in room tariffs and food pricing. The
A report from PHD Chamber of Commerce and Industry has said India's already-weak inbound tourism is estimated to go down 15–20% this year as the Iran War severs the aviation corridors that deliver the bulk of long-haul visitors to the country.
As the wedding season is also knocking the door, the event caterers are also revising per-plate charges upward, potentially dampening demand.
Food delivery platforms are also witnessing menu price increases across partner outlets. The move could weigh on order volumes in price-sensitive categories.
As the restaurants, dhabas, and cloud kitchens are among the hardest hit increasing the prices of food items, the delivery of foods will also get impacted.
The sustained high domestic LPG prices could also lead to a shift toward alternative fuels such as piped natural gas (PNG) and electric cooking solutions.
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