Mumbai: The hotel industry in Mumbai is facing a severe crisis following shortage of commercial LPG gas. This is the immediate outcome of the war situation in the Middle East. Of the 16,000 eateries 20 % , mostly in central Mumbai, have already downed shutters because of zero supply of gas. Hari Dev, a bachelor who has breakfast daily at Ramnath Snacks in Colaba Causeway, told FPJ ``This morning the outlet had only bun maska and lassi on offer. I had to return with an empty stomach." Like Hari Dev, thousands of Mumbaikars who depend on restaurants for food, were disappointed to find their regular hotels shut. Thousands of hotel employees are also facing the prospect of losing their jobs. ``I am from Jharkhand and I am working in a hotel in Fort as a dish washer for the past two years. My employer has told me to be prepared to be sacked," said Arun Lal.
Centre Directs OMCs to Prioritise Domestic Consumers
Maharashtra's minister for civil supplies Chhagan Bhujbal said on Tuesday that gas supply to hotels are being curtailed by oil marketing companies who have been instructed by the Union government to give priority to domestic consumers amid the ongoing conflict in West Asia that has disrupted global fuel supply chains.
In a video message, Bhujbal said several hotel owners had met him to raise concerns about the growing shortage of commercial liquefied petroleum gas (LPG). According to him, the Centre has directed oil companies to ensure uninterrupted supply to household consumers first.
“I personally met the chief minister Devendra Fadnavis and discussed the situation. There are clear instructions from the Central government to all oil companies to prioritise domestic gas,” Bhujbal said.
Kerosene Option Suggested, Hoteliers Cite Safety Concerns
The minister acknowledged that the move could adversely affect the hospitality industry, particularly in Mumbai. He said an option of using kerosene was suggested for eateries, but hoteliers expressed safety concerns and pointed out that switching fuels would require major changes in existing kitchen infrastructure.
Meanwhile, Maharashtra Revenue Minister Chandrashekhar Bawankule warned that strict action would be taken against those hoarding LPG cylinders. Speaking to reporters at the Vidhan Bhavan, where the state legislature’s budget session is underway, he said district collectors across Maharashtra had been directed to act against hoarding.
“The government's priority is to ensure uninterrupted supply of domestic gas. In a crisis-like situation, commercial supplies are bound to be affected, but we will see to it that this does not continue for a long period,” Bawankule said, adding that the opposition should avoid politicising the issue during a crisis.
AHAR President Says 20% Hotels Already Shut
Industry representatives, however, warned that the shortage is already severely affecting operations. Vijay Shetty, president of the Association of Hotels and Restaurants (AHAR), told The Free Press Journal that the situation has begun to force eateries to shut down.
“Already 20% of hotels in Mumbai have shut over fuel shortage and another 60% will down shutters in the next couple of days. The crisis caused by the war in Iran is impacting us now,” he said.
Black Market Emerges as Cylinder Prices Double
Shetty also alleged that a black market for LPG cylinders has emerged amid the shortage. “A commercial cylinder costing Rs 1,600 is now being sold for around Rs 3,000,” he claimed, adding that a delegation of AHAR was expected to meet Bhujbal to discuss the issue.
The hospitality sector has also written to the Ministry of Petroleum and Natural Gas and the state civil supplies department seeking urgent intervention to restore supplies.
Echoing the concerns, Pradeep Shetty, vice-president of the Federation of Hotel and Restaurant Associations of India (FHRAI) and spokesperson for the Hotel and Restaurant Association (Western India), said the situation had worsened significantly over the past week.
Disruptions Reported in Maharashtra and Other States
“The shortage of commercial LPG has become extremely serious over the past week, with intermittent disruptions escalating into a near complete halt in supply in several regions since yesterday. Following the notification dated 05 March by the Ministry of Petroleum and Natural Gas, there has been considerable confusion among suppliers and distributors, many of whom have stopped supplying commercial LPG cylinders to hotels, restaurants and food service establishments.
We are already receiving reports of severe shortages from cities including Mumbai, Pune, Aurangabad and Nagpur, while similar disruptions are being reported in States such as Delhi, Karnataka, Telangana and Andhra Pradesh. If the situation does not improve within the next two days, nearly 50 per cent of hotels and restaurants in Mumbai may be forced to temporarily shut operations depending on the stock of cylinders they currently have. This will especially affect international tourists both, who are already here and those who will be visiting the country. Also, smaller and medium-sized eateries will be the first to be impacted, as they typically operate with limited reserves.
Sector Deemed Essential, Supports Vast Employment Ecosystem
The hospitality sector is an essential service that caters to millions of people every day including working professionals, students and travellers both, domestic and international and, supports a vast ecosystem of employment through cloud kitchens, industrial kitchens and catering establishments. During the COVID-19 pandemic, the sector was rightly recognised as essential, and its role in supporting urban food supply continues to remain critical.
While alternatives such as electric or induction-based cooking are gradually emerging, they are not yet viable for most commercial kitchens that rely on high-intensity, fast-paced cooking methods typical of Indian cuisine. Transitioning to such systems also involves significant cost and infrastructure changes. At present, the industry has no practical alternative and urgently requires restoration of uninterrupted commercial LPG supply to ensure that hotels, restaurants and food service establishments can continue operating without disruption.”
India consumes around 31.3 million tonnes of LPG annually, of which nearly 87 per cent is used by households while the remaining demand comes from commercial establishments such as hotels and restaurants. Nearly 62 per cent of the country’s LPG requirement is met through imports.
Ministry Orders Refineries to Boost Domestic LPG Output
Meanwhile, the Ministry of Petroleum & Natural Gas on X posted that In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, Ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use.
“The ministry has prioritised domestic LPG supply to households and introduced 25 day inter-booking period to avoid hoarding/ black marketing.
Non domestic supplies from imported LPG is being prioritised to essential non domestic sectors such as Hospitals and Educational institutions.
For LPG supply to other non-domestic sectors, a committee of three EDs of OMCs have been constituted to review the representations for LPG supply to restaurants/hotels/other industries,“ the post reads.
Industry sources said the ongoing conflict involving Iran and the disruption of shipping through the Strait of Hormuz — a critical sea route through which India receives a large share of LPG imports from West Asian nations such as Saudi Arabia and Qatar — has significantly impacted supplies, triggering the current shortage.
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