LPG Shortage Forces 40% of Restaurants in Kerala to Shut Down

India’s ongoing LPG supply disruption has severely impacted the hospitality sector, with around 40% of restaurants in Kerala reportedly shutting down as businesses struggle to secure commercial LPG cylinders.

The shortage is linked to the West Asia conflict, which has disrupted fuel imports routed through the Strait of Hormuz, a critical shipping route for energy supplies to India.

Industry representatives warn that the crisis is affecting restaurants, caterers, hostels, canteens and even crematoriums across several states.

Restaurants Unable to Secure LPG

Restaurant owners in Kerala say many establishments have been forced to close temporarily as they are unable to switch to alternative cooking fuels.

The LPG shortage has created operational challenges for food businesses that rely heavily on commercial gas cylinders for daily cooking.

In some cities, restaurants have resorted to using firewood and other traditional fuels to continue serving customers.

Government Boosts Domestic Production

To manage the supply disruption, the government has increased domestic LPG production.

Officials said India has redirected C3–C4 hydrocarbon streams to boost LPG output by more than 25%, helping offset part of the supply shortage.

At the same time, the government has begun diversifying LPG imports, sourcing supplies from countries such as:

• United States

• Norway

• Canada

• Algeria

• Russia

These measures are aimed at stabilising fuel availability as the conflict in West Asia continues to disrupt traditional supply routes.

Alternative Fuels Being Used

Over the past month, many businesses have started using alternative fuels to conserve LPG for priority sectors.

Hotels, small restaurants and street food vendors have increasingly turned to:

• Coal

• Kerosene

• Biomass pellets

• Refuse-derived fuel (RDF) pellets

Corporate cafeterias and institutional kitchens are also experimenting with induction cooking systems, boilers and biofuels to maintain operations.

Priority Supply for Essential Services

The government has prioritised LPG distribution to critical sectors such as:

• Hospitals

• Educational institutions

• Key commercial consumers

Restaurants and other food establishments will receive about 20% of their average monthly LPG allocation as part of emergency supply measures.

State governments have also been directed to monitor LPG distribution to prevent hoarding and black-market activities.

Businesses and Workers Under Pressure

The LPG shortage is already affecting business operations and employment across several sectors.

Corporate catering firms have reduced menu options and shifted to simpler dishes that require less cooking gas.

Some companies, including HCLTech, have advised employees to work from home temporarily due to disruptions in cafeteria services.

Meanwhile, gig workers, small vendors and street food operators are facing financial strain as the fuel shortage disrupts daily operations.

Industry experts warn that the crisis could continue to impact restaurants, hospitality services and small businesses if LPG supplies are not restored soon.