Oil Ministry Forms Panel to Address LPG Shortage in Hospitality Sector
New Delhi: The oil ministry formed a committee to look into supply issues after a sudden shortage of commercial LPG cylinders alarmed the hospitality industry; Restaurant associations warned that restaurants may close within a few days if supplies are not restored.
As the widening conflict in the Middle East has disrupted India’s fuel lifelines, including LPG supplies, the government has prioritized the supply of home cooking gas to households. This situation caused a supply shortage in hotels and restaurants using market-priced commercial LPG.
“For LPG supply to other overseas sectors, a committee of three Executive Directors (EDs) of Oil Marketing Companies (OMCs) has been constituted to review representations regarding LPG supply to restaurants/hotels/other industries,” the ministry said in a post published on X. he said.
India consumed approximately 31.3 million tons of LPG annually. 87 percent of this is in the home sector, that is, in home kitchens, and the rest is in commercial establishments such as hotels and restaurants.
62 percent of this need is met by imports. The US and Israel’s attack on Iran and Tehran’s retaliation have closed the Strait of Hormuz, through which India supplies 85-90 percent of LPG imports from countries like Saudi Arabia.
While alternative sources were explored, the limited supply available meant the government prioritized supplies to the domestic sector, and commercial establishments suffered in the process.
Industry sources say the outage has started affecting operations in Mumbai and Bengaluru as hotels and restaurants are struggling to source cooking gas.
Vijay Shetty, president of the Hotels and Restaurants Association of India, said the shortage is spreading rapidly and could soon cripple the industry.
While maintaining that the country has adequate fuel stocks, the ministry has recently directed refineries to maximize LPG production by reducing petrochemical flows and extended the LPG refill booking cycle from 21 days to 25 days.
“In light of the current geopolitical disruptions in fuel supply and restrictions in LPG supply, the ministry has directed oil refineries to produce higher LPG and use this extra production for domestic LPG use,” the post on Ministry X said. he said.
“The Ministry has prioritized domestic LPG supply to households and introduced a 25-day inter-booking period to prevent hoarding/black marketing.”
It was stated that priority was given to non-domestic supplies from imported LPG to non-domestic key sectors such as hospitals and educational institutions.
