Despite relief, hotels unlikely to reduce food prices soon; owners want LPG at pre-war rates

Oil marketing companies are expected to reduce the price of a commercial LPG cylinder by around ₹180 on Wednesday, July 1, 2026, which is expected to bring some relief to the hotel and restaurant industry. But this is unlikely to have an immediate impact on restaurant patrons’ food bills.

Also read | Commercial LPG prices reduced by ₹183 per fill-up

restaurant operators Hindu He said they welcomed the move but wanted the prices of commercial LPG cylinders to return to pre-war levels.

“In Bengaluru, where the industry was expecting a cut of ₹500 per cylinder, we have received a cut of ₹177 per 19.2 kilo commercial LPG cylinder. Our expectation is reasonable as the current price of crude oil per barrel has almost touched the February 2026 level,” said GK Shetty, president of the Karnataka State Hoteliers Association.

Mr. Shetty said he expects “another bounce back after July 15” and wants to see the cylinder price “settle at ₹2,000 by the end of this month”.

M. Ravi, president of the Chennai Hoteliers Association, called the discount a “little relief, like a summer rain”. As the cost of basic materials such as rice and dal has increased significantly, the government needs to bring the prices back to their previous levels.

Sathish D. Nagasamy, managing director of Dindigul Thalappakatti, said LPG prices have not returned to normal levels. “The prices of chicken and other ingredients have also increased. However, when these costs decrease, this discount will truly benefit the hotel industry. The prices of all products are linked to LPG costs,” he said.

Several restaurant owners in Mumbai said the discount would “make almost no difference” and there would be no change in the prices of food items.

“With an increase of around ₹1,300 per cylinder, a decrease of ₹183 hardly makes any difference. Large consumers may get some benefit, but mid-range restaurant owners, who constitute the bulk of the crowd, will not benefit,” said a restaurant owner. “We had to suffer a lot of losses in the beginning. There is also no certainty that prices will not rise again because the West Asian conflict is not over yet,” he said.

According to Jegan Damodarasamy, chief executive officer of Sree Annapoorna Group in Coimbatore, “prices have increased by 100% and the decline is only around 10%”.

“We need to wait and see. Although there has been no problem in the supply of commercial cylinders for the last 20 days, transportation costs and the price of packaging materials have increased due to the war. These prices must also decrease in order for hotels to revise their food prices downwards,” he said.

Asked if hotels and restaurants will roll back menu prices once LPG cylinder prices drop to ₹2,000, he said: “Once that happens, we need to see how quickly and by how much we can do something about menu pricing. We can’t say anything right now.”

Calling the price cut a “much-needed relief”, Piyush Kankaria, president of the Kolkata chapter of the National Restaurant Association of India, said the city’s restaurants and cafes “have been struggling with high input costs for months”.

“Given that up to 15% of kitchen expenses come from fuel, this reduction eases immediate pressure on operating costs, helps keep menu prices stable and gives operators room to focus on quality and guest experience. For a price-sensitive market like Kolkata, predictable energy costs are essential if the hospitality sector is to be planned and grow sustainably,” he said.

Welcoming the move, East India Hotel Restaurant Association president Sudesh Poddar said the government should reduce LPG prices to pre-war level prices.

(Contributions by M. Soundariya Preetha in Coimbatore, Senjuti Sengupta in Kolkata, Lalatendu Mishra in Mumbai, Mini Tejaswi in Bengaluru and Sangeetha Kandavel in Chennai.)

It was published – 01 July 2026 23:00 IST