Restaurants Face Closure Risks Amidst LPG Supply Crisis

Restaurant Stocks May Open Lower as Commercial LPG Supply Concerns Mount​

Quick service restaurant operators and food delivery companies such as Jubilant FoodWorks, Westlife Foodworld, Devyani International, Swiggy, and Eternal are expected to begin Tuesday’s trading session on a weaker note as concerns rise over disruptions in commercial LPG supplies to restaurants across several regions in India.

Restaurant Bodies Flag Supply Disruptions​

Restaurant associations from Bengaluru, Tamil Nadu, Maharashtra, and Delhi have raised alarms that commercial LPG supplies to eateries have effectively stopped in multiple areas. The groups have written to the Ministry of Petroleum requesting urgent intervention to address the situation.

The National Restaurant Association of India stated that restaurants currently have, at best, around one week of LPG supplies remaining. The industry body warned that the sector depends heavily on commercial LPG for operations, and any prolonged disruption could severely affect restaurant activity.

In its communication to the ministry, the association cautioned that extended supply shortages could force many establishments to shut down operations. It also warned about the possibility of what it described as catastrophic closures across the sector if the issue is not resolved quickly.

Restaurants May Face Closures or Menu Cuts​

According to the National Restaurant Association of India, the shortage of commercial LPG is severe and current supplies may not last beyond a week. If the situation persists, restaurants may be forced to either temporarily close or reduce menu offerings depending on whether alternative fuel options are available.

The association has formally approached the Ministry of Petroleum and Natural Gas seeking immediate action.

Government Monitoring LPG Availability​

Government sources indicated that India is exploring options to secure additional LPG supplies from the United States and Canada. Officials added that there are currently no plans to impose fuel restrictions.

Authorities are expected to ensure that industrial and commercial fuel consumption continues without disruption, although domestic CNG supply will continue to receive priority.

Directive on Domestic LPG Supply Linked to Confusion​

According to officials and industry bodies, the supply uncertainty appears to have started after a government directive issued on March 5. The order asked public sector oil marketing companies to prioritize domestic LPG supplies.

The Federation of Hotel and Restaurant Associations of India stated that the wording of the directive has created confusion at the distributor level. Some distributors reportedly halted commercial LPG deliveries after the order was issued.

Bengaluru Hotels Warn of Possible Shutdowns​

In Bengaluru, the Bangalore Hotels Association has warned that hotels may begin shutting operations from Tuesday. The association said commercial LPG cylinder supplies stopped from March 9 despite earlier assurances from oil companies that there would be no disruption for 70 days.

Potential Impact on Food Delivery Platforms​

Any restaurant shutdowns could also affect food delivery companies such as Swiggy and Zomato. A reduction in restaurant operations would directly impact order volumes and delivery activity on these platforms.

The Ministry of Petroleum and Natural Gas said the government has formed a panel to assess fuel requirements for restaurants and the auto sector. The panel will evaluate the situation and attempt to allocate LPG volumes to these segments.