Ahmedabad: The revision in prices of commercial LPG cylinders on Friday — the third consecutive monthly hike — has sharply raised operating costs for restaurants, hotels and street food vendors, many of whom depend heavily on LPG for daily cooking.
As global energy prices continue to rise amid the ongoing West Asia conflict, a 19-kg commercial LPG cylinder, widely used by eateries and hospitality businesses, has become costlier by a record Rs 993. In Ahmedabad, the new price reached Rs 3,091, according to officials of Indian Oil Corporation Ltd (IOCL).
The increase is expected to squeeze margins across the food service sector, where fuel remains a key operational expense. Industry participants said many establishments may eventually be forced to either hike prices by 20-30% or reduce portion sizes to cope with the higher cost burden.
Small businesses are also increasingly exploring alternatives such as induction cooking and firewood in an effort to remain viable as LPG prices continue to climb.
Dilip Thakkar, co-chapter head of the National Restaurant Association of India, said, "The price hike in commercial LPG cylinders will impact a number of food joints. However, they are unlikely to increase food prices immediately because of competition in the market. We believe the price rise will gradually be passed on."
Restaurant owners said the impact was especially severe for businesses that do not have access to piped natural gas (PNG) connections.
Ankit Gupta, a restaurateur in Ahmedabad, said, "Commercial LPG cylinder prices have been on an upward trajectory, and for a large number of eateries that still do not have access to PNG connections, this has become a critical cost pressure point. Unlike larger hotels that may have some flexibility in procurement or pricing, standalone and mid-sized restaurants and chains are far more exposed to such fluctuations because LPG remains their primary fuel source."
"Typically, gas accounts for about 8–9% of total food production costs for a multicuisine restaurant that heavily relies on gas, but its impact is disproportionate. Even a marginal increase affects overall kitchen economics, especially when other inputs such as edible oils, vegetables and labour are already volatile. The steep increase in LPG costs will have a bearing on our menu pricing, which we will be forced to increase," Gupta added.
Operators in the mid-segment said frequent menu revisions are difficult when average customer bills range between Rs 900 and Rs 1,000, forcing many to absorb part of the increase despite shrinking margins.
Rushabh Purohit, a restaurateur in Ahmedabad, said, "We have already begun rationalising our LPG consumption and are increasingly relying on alternatives such as coal-based stoves wherever feasible. Given that a significant part of our kitchen operations still depends on LPG, both supply constraints and rising prices have had a direct impact on our cost structure."
