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New Delhi: In response to a sudden shortage of commercial LPG cylinders that has raised alarms in the hospitality industry, the oil ministry has established a committee to investigate supply challenges. Restaurant associations have warned that without a swift restoration of supplies, many eateries may be forced to close their doors within days.

The ongoing conflict in the Middle East has disrupted fuel supplies, including LPG, prompting the government to prioritize domestic cooking gas for households. This shift has resulted in a supply shortage for hotels and restaurants that rely on market-priced commercial LPG.

To address the LPG supply for non-domestic sectors, a committee comprising three Executive Directors from Oil Marketing Companies (OMCs) has been formed to evaluate requests for LPG supply to restaurants, hotels, and other industries, as stated by the ministry on X.

India's annual LPG consumption stands at approximately 31.3 million tonnes, with 87% utilized in domestic kitchens and the remainder in commercial settings like hotels and restaurants.

Notably, 62% of this demand is satisfied through imports. Recent geopolitical tensions, including the US and Israel's actions against Iran and Tehran's subsequent retaliation, have led to the closure of the Strait of Hormuz, which is crucial for India's LPG imports from nations such as Saudi Arabia.

As the government seeks alternative sources, the limited available supplies have resulted in prioritizing domestic needs, adversely affecting commercial establishments.

Industry insiders report that the disruption is already impacting operations in major cities like Mumbai and Bengaluru, where hotels and restaurants are struggling to obtain cooking gas.

Vijay Shetty, president of the India Hotels and Restaurant Association, expressed concern that the shortage is rapidly escalating and could soon cripple the sector.

Despite assurances from the ministry regarding adequate fuel stocks, recent directives have instructed refineries to maximize LPG production by reducing petrochemical output and extending the LPG refill booking cycle from 21 to 25 days.

In light of the current geopolitical disruptions affecting fuel supply and LPG availability, the ministry has mandated oil refineries to increase LPG production, with the additional output allocated for domestic use.

Furthermore, the ministry has prioritized domestic LPG supply for households and implemented a 25-day inter-booking period to prevent hoarding and black market activities.

Essential non-domestic sectors, such as hospitals and educational institutions, are receiving priority for non-domestic LPG supplies from imports.