Commercial LPG price hike in India raises hotel and restaurant costs, associations urge rollback

Hospitality industry groups said the latest rise in commercial LPG prices has increased pressure on hotels and restaurants. They said the change hit an industry already dealing with closures and job cuts. Associations urged the government to step in and withdraw the increase. They warned the move could worsen business conditions in the coming weeks.

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Commercial LPG, used widely in kitchens across hotels and restaurants, has risen sharply. The price of a 19-kg commercial cylinder increased by Rs 993. It reached a record Rs 3,071.50 per cylinder. Industry bodies said higher fuel costs were adding to cash stress and daily operating challenges.

Commercial LPG price hike hits hotels and restaurants

Pradeep Shetty, Spokesperson, Hotel And Restaurant Association Western India - HRAWI & Vice President, FHRAI Federation of Hotels and Restaurants Association of India, said, Due to the recent rise in LPG prices, a 10 to 15 per cent hike in menu prices is imminent. But even that may not be enough to absorb the impact. We urge the government to urgently intervene, roll back this hike and stabilise LPG prices to give the sector some breathing space. Without immediate relief, the hospitality industry, a key employment generator, faces an existential crisis.

Shetty linked the latest rise to earlier increases in recent months. Commercial LPG went up by Rs 195.50 in April and Rs 144 in March. The new Rs 993 increase followed soon after those revisions. Shetty said the combined rise amounted to Rs 1,332.50 across three price changes.

Shetty said businesses were facing higher costs during a difficult operating period. Shetty pointed to supply disruptions, lower operating capacity, and weaker cash flows. Shetty added that these pressures were already affecting daily decisions. Shetty said the added LPG cost increased strain on already thin margins.

Commercial LPG costs add to operational strain

Shetty said some outlets were running on reduced hours and smaller menus. Shetty also said some kitchens were trying alternative cooking arrangements. Shetty linked these steps to inconsistent supply and rising fuel costs. Shetty said the newest revision could make operations less sustainable for many establishments.

Shetty said several establishments had already shut down on a temporary basis. Shetty warned the latest commercial LPG increase could speed up closures. Shetty also said it could add to job losses in the sector. Industry groups repeated their call for the government to reverse the hike.

With inputs from PTI