Hyderabad Grapples with Escalating LPG Crisis as Domestic Cylinders Enter Black Market
Amid a deepening LPG shortage in Hyderabad, domestic cooking gas cylinders are now flooding the black market to meet surging demand. Initially, the crisis saw limited stocks of 19 kg commercial cylinders being sold illegally for Rs 3,000 to Rs 4,000 each, far above their regular price of Rs 2,105. However, as commercial cylinder stocks have nearly vanished, the focus has shifted to 14.2 kg domestic cylinders, which are being traded illegally for upwards of Rs 2,000—more than double their standard price of Rs 965, according to officials from the civil supplies department.
Illegal Diversion Channels and Major Customers
Officials reveal that these domestic cylinders are being sourced through multiple illicit channels. These include paying beneficiaries a 'cut' to surrender their allotments, bribing delivery personnel to divert cylinders when households are found locked, and directly procuring stock from dealers for resale. The primary customers for these black-market cylinders are mid-sized restaurants and hostels, which are struggling due to the commercial LPG supply halt.
Recent enforcement actions have targeted areas like Krishna Nagar, Srinagar Colony, Asifnagar, Mehdipatnam, Malakpet, Abids, and Mallepally, where the majority of cases have been reported. In just the last two days, authorities seized at least 100 domestic cylinders from hotels and restaurants, booking six cases against establishments for illegal activities.
Authorities Intensify Crackdown on Black Marketing
Special teams from the civil supplies department have ramped up inspections to curb the illegal trade. An official from the enforcement wing emphasized, "Strict action will be taken against those involved in the diversion, storage, and sale of domestic LPG in the black market, as the crisis deepens." Authorities are closely monitoring distribution points and refilling centers to prevent the diversion of cylinders meant for residential use.
Authorized dealers have warned that unchecked diversion to commercial establishments and black-marketing could create an "artificial shortage in the domestic segment, affecting families who rely on LPG." They urge tighter monitoring at distribution points and tracking of suspicious bulk purchases, noting that large-scale diversions to hotels, restaurants, or catering units could disrupt supply chain balance.
Supply Chain Pressures and Commercial Sector Pleas
Hyderabad currently has three LPG bottling plants in Cherlapally operated by major oil companies, along with 10 distributors supplying commercial cylinders. The city requires approximately 22,000 commercial cylinders daily to meet the needs of hotels, hostels, and food establishments. However, nearly 90% of commercial LPG refilling has been temporarily halted to prioritize domestic supply, with exceptions only for essential services like hospitals and schools.
Jagan Mohan Reddy, president of the Telangana LPG Distributors Association, stated, "This gap has put significant pressure on LPG distributors as we are receiving continuous requests and inquiries from hotels, hostels, and other commercial establishments seeking cylinders."
Meanwhile, restaurant owners and hostel operators are urging authorities to restore commercial cylinder supply by at least 50%, highlighting that the shortage is severely impacting food services across Hyderabad. They warn that prolonged disruption could affect not only restaurants but also mess facilities, small tiffin centers, bakeries, and street food vendors, many of whom depend entirely on LPG for daily operations.
