Pradeep Shetty, Vice President of the Federation of Hotel & Restaurant Associations of India (FHRAI), expressed serious concerns regarding the ongoing shortages of commercial LPG cylinders affecting various Indian cities. Numerous hotels and restaurants are experiencing significant disruptions, with operations nearly coming to a standstill.

Shetty remarked that the situation has deteriorated over the past week, with severe supply interruptions reported since March 5, following a notification from the Ministry of Petroleum and Natural Gas. Confusion among suppliers and distributors has risen, with many halting deliveries of commercial LPG to essential businesses.

Andhra Pradesh experiencing similar challenges

According to Shetty, cities including Mumbai, Pune, Aurangabad, and Nagpur are facing acute shortages. Other regions such as Delhi, Karnataka, Telangana, and Andhra Pradesh are also experiencing similar challenges. He indicated that if the supply situation does not stabilize within the next two days, up to 50 percent of hotels and restaurants in Mumbai may be compelled to close temporarily, depending on the availability of gas cylinders.

Shetty further highlighted that this crisis could adversely affect international tourists currently in India and those planning to visit. Smaller establishments, operating with limited stock, are expected to be hit hardest by these disruptions.

Contradicting Claims from Local Supplier

In contrast, Ravi Kant, the manager of an Indane gas facility in Ranchi, dismissed the claims of a shortage. He attributed the current disruptions to logistical challenges during the Holi festival, stating that gas supplies would normalize within a couple of days. Kant emphasized that there is a sufficient stock of gas, and the delay is due to drivers being unavailable rather than a shortage of the product itself.

Additionally, Vimal Shukla, District Supply Officer in Uttar Pradesh, announced an extension of the booking interval for gas cylinders from 21 days to 25 days. He clarified that there is no scarcity in their region, with 40 functioning agencies. Shukla explained that 80 percent of gas bookings will now require One Time Passwords (OTPs), and consumers not receiving these codes are urged to update their contact information to facilitate smooth transactions.

Local Impact and Temporary Solutions

In Lucknow, Jitendra Kumar Singh, an associate member of a local hotel group, mentioned that while they have not yet faced cylinder shortages, inquiries revealed that scarcity exists elsewhere, notably impacting sectors reliant on gas supply. As a proactive measure, local hotels are exploring alternative solutions such as induction cooking and using green gas while the situation unfolds.

The LPG shortages stem from broader challenges, exacerbated by geopolitical tensions and disruptions in West Asia. Restaurant owners, hotel managers, and various businesses are increasingly concerned about their reliance on gas supplies for day-to-day operations.

Wider Economic Context

Despite the immediate issues affecting commercial LPG, a government representative indicated that long-term disruptions to Liquefied Natural Gas (LNG) supplies in Asia are unlikely, even amid recent geopolitical conflicts. While delays in deliveries may occur, the overall supply is expected to remain intact. The government source noted that rising prices for LNG and disruptions have changed the dynamics of the global gas trade, allowing shipments from more distant suppliers to become economically feasible despite higher transportation costs.

India’s dependence on imported LNG to fulfill its natural gas requirements remains significant, with many contracts linked to long-term agreements. Qatar continues to be a primary source for these imports, traditionally characterized by competitive pricing in Asian markets.

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