Restaurant India News: LPG Shortage Hits Restaurants Hard, Jobs and Business at Risk

India’s restaurant industry is facing major losses due to a shortage of commercial LPG, linked to the ongoing conflict in West Asia, according to PHDCCI. The industry is losing around ₹79,000 crore every month, which equals about ₹2,650 crore per day. Business activity has slowed by 15–20%, affecting everyone from small eateries to large hotel kitchens.

Due to the shortage, many restaurants have reduced menu options, cut operating hours, or temporarily shut down. The situation has also put up to 7 lakh jobs at risk. The crisis is mainly caused by supply disruptions at the Strait of Hormuz, a key route for fuel shipments. This has highlighted India’s heavy dependence on imported LPG and created one of the most serious challenges for the food services sector in recent years.

"Nearly 10 per cent of restaurants have temporarily shut down, while 60 to 70 per cent of establishments have shifted to induction cooking, alternate fuels, reduced menus or shorter operating hours to manage limited supplies. This has started to directly affect consumer behaviour, with dining-out frequency declining by 8 to 10 per cent and average customer spending dropping by 6 to 8 per cent, resulting in a measurable slowdown in industry throughput, “said Sagar Daryani, President, NRAI.

India’s restaurant sector, which employs over 8.5 million people, is under severe strain due to the ongoing LPG shortage. If the situation continues, an estimated 5–7 lakh jobs could be lost. Many restaurants have switched to induction cooking or other fuels, reduced menu offerings, or scaled down operations. Around 10% of outlets have temporarily shut, with smaller businesses facing the greatest risk due to limited financial support. At the same time, consumer behaviour is changing, with dining-out frequency falling by 8–10% and customers spending less per visit.

The problem began in early March 2026 after US and Israeli strikes on Iran disrupted movement through the Strait of Hormuz, a key route that handles about 90% of India’s LPG imports. Since India depends on imports for nearly 60% of its LPG needs, the disruption and damage to regional energy infrastructure have significantly reduced supplies. Limited alternative supply routes and slow adoption of options like piped gas and biogas have made the situation worse.

The Petroleum Ministry has rejected reports claiming that LPG supply will take three to four years to stabilise. Officials say India has diversified its sourcing, increased domestic refinery output by 40%, and maintained stable delivery schedules without major shortages. The ministry has urged people to rely only on official updates, stating that the country’s LPG supply system remains strong.