Hyderabad Restaurants Grapple with LPG Black Market Crisis as Prices Skyrocket
In Hyderabad, a severe supply crunch has triggered rampant black marketing of commercial LPG cylinders, with dealers exploiting the shortage by selling 19-kg cylinders for exorbitant prices ranging from ₹4,000 to ₹7,000. This marks a staggering increase from the official rate of approximately ₹1,800, placing immense pressure on the city's hospitality sector.
Restaurateurs Forced to Pay Premium Amid Desperate Shortage
Restaurant owners report that prices began climbing steadily over recent days before surging dramatically. "Post the crisis, we were already paying about ₹3,000 per cylinder. Now dealers are quoting even more — ₹5,000 or more— depending on availability. If we refuse, they simply sell it to another restaurant that urgently needs cooking gas," explained a Secunderabad-based restaurateur, highlighting how limited stock has empowered traders to inflate costs unchecked.
With kitchens unable to halt operations, many establishments feel compelled to accept these inflated quotes. "We cannot stop kitchen operations. So many of us are forced to purchase cylinders at whatever price is quoted," said the owner of a city restaurant chain, who recently paid ₹13,000 for just two cylinders on Sunday, underscoring the dire situation.
Profit Margins Erode as Operating Costs Spike
The steep price hike is severely impacting profitability across the industry. "We have been spending two to three times more on cooking gas since we require at least four to five cylinders every day. It has directly affected our daily margins," noted a Jubilee Hills restaurant and bar owner. In response, numerous eateries are implementing cost-cutting measures, including pruning menus to conserve fuel.
According to Ayush Agrawal of Air Live, kitchens are strategically shifting away from fuel-intensive dishes. "Items like slow-cooked gravies and deep-fried snacks are being reduced, while dishes that rely more on ovens or grills — such as pizzas, burgers, sandwiches, garlic bread, grilled chicken and baked pasta — are being highlighted on menus," he detailed.
Limited Relief from Alternatives and Industry Advocacy
Some restaurants have turned to induction stoves for basic tasks like boiling or reheating food, but these offer only partial solutions as commercial kitchens remain heavily dependent on LPG for core preparations. "Apart from this, we are also in discussions with the National Restaurant Association of India, which has written to the ministry of petroleum and natural gas requesting assured supply to hotels," shared Nitish Tokle of Chamkila, a Jubilee Hills restaurant and pub, indicating broader industry efforts to address the crisis.
The ongoing supply shortage and resultant black marketing are creating unsustainable conditions for Hyderabad's restaurant sector, forcing operators to adapt while advocating for governmental intervention to stabilize LPG availability and pricing.
