India is facing a severe shortage of liquefied petroleum gas (LPG) following the closure of the Strait of Hormuz by Iran amid escalating tensions in West Asia. The strait is the conduit for nearly 90% of India's LPG imports and 30% of its natural gas requirements, making the conflict's ripple effects acutely felt across the country's hospitality, industrial, and household sectors.

Government Response

The Ministry of Petroleum and Natural Gas invoked the Essential Commodities Act on March 6, directing refineries to maximise LPG output and prioritising supply to domestic households. The LPG refill booking cycle was extended from 21 to 25 days. The following day, prices were revised upward non-subsidised domestic cylinders rose by ₹60, and commercial 19 kg cylinders by ₹114.5, the first such hike since April last year. A three-member committee of Oil Marketing Company executives has been constituted to review supply shortfalls for the commercial sector, including hotels and restaurants.

Hospitality Sector Under Pressure

The crisis has hit the restaurant and hotel industry hardest. Major associations including NRAI, AHAR, and regional bodies from Bengaluru, Chennai, Odisha, and Punjab have warned of widespread closures. In Mumbai, around 20% of hotels and restaurants have already shut, with associations predicting the figure could reach 50% within days. In Bengaluru, many small eateries restricted their menus to tea and coffee after commercial cylinder refills halted from March 7. Restaurateur Zorawar Kalra warned that a single day's supply disruption costs the industry and the broader economy between ₹1,200–1,300 crore, noting that 75% of the ₹6.6-lakh-crore restaurant ecosystem depends on LPG.

States Take Action

Several state governments have responded with their own measures. Gujarat has imposed a 50% cut in gas supply to industries, with a 40% reduction for fertiliser and milk processing units. Madhya Pradesh formed a three-member monitoring committee, while Kerala convened a meeting with oil company representatives and deployed district-level inspection squads to curb hoarding. Karnataka Chief Minister Siddaramaiah and Tamil Nadu Chief Minister M.K. Stalin have both written to the Centre urging immediate relief. Andhra Pradesh, whose Visakhapatnam port houses a major LPG cavern with a 60,000 metric tonne capacity, has reassured residents of adequate stocks while acknowledging a vessel delay due to Strait disruptions.

Wider Impact

Beyond restaurants, the shortage is straining paying guest accommodations in Hyderabad's IT corridors, textile processing factories in Coimbatore, and CNG-dependent autorickshaws in Kolkata. In Delhi-NCR, smaller outlets are resorting to black market cylinders, with prices surging from ₹1,200 to ₹1,400–1,500 in a single day. Panic buying and long queues at distribution centres have been reported across Bihar, Uttar Pradesh, Jharkhand, Rajasthan, and Chhattisgarh. The wedding season has compounded anxiety in Punjab and Rajasthan, where hoteliers fear significant revenue losses during one of the busiest periods of the year.

The situation remains fluid, with the government urging calm while multiple states and industry bodies push for a coordinated national response to restore supply and prevent prolonged economic disruption.