India’s restaurants face closures as Iran war disrupts cooking gas supply

MUMBAI: In India’s financial hub, one restaurant is down to its last cylinder of cooking gas.

Cafe Madras, known for its traditional South Indian dishes, has not received fresh supplies for the past few days. Its owners said they have not been given clarity on when new stock will arrive, creating uncertainty for daily operations.

“The items on our menu have been cut down by almost 80 per cent. We're relying only on pantry menu snacks, like sandwiches, which don't rely on gas,” said Ishaan Shetty, one of the cafe’s owners.

The restaurant is considering switching to electric induction stoves as an alternative, but the option is more expensive and not well suited to traditional cooking methods.

The problem extends beyond Mumbai.

Eateries across the world’s most populous nation are grappling with a shortage of liquefied petroleum gas (LPG), as supply disruptions linked to the United States-Israel war on Iran expose the country’s reliance on energy imports. 

Restaurant associations are warning that LPG, which is widely used for cooking, is not reaching many eateries, forcing some businesses to consider temporarily shutting their doors.

The Middle East conflict has led to the closure of the Strait of Hormuz, disrupting global oil shipments as well as driving up energy prices and transport costs. 

India’s imports of Liquefied Natural Gas (LNG), used to generate electricity, are also at risk. 

Its largest supplier Qatar halted production last week after Iran struck oil facilities in neighbouring Gulf countries. Tehran has made clear it intends to impose a prolonged economic shock in retaliation to attacks by the US and Israel.

DIVERTED FOR DOMESTIC USE

India – the world’s second-largest LPG importer – purchases more than half the LPG it consumes, with most supplies coming from the Middle East.

As global energy prices rise, Indian companies have increased cylinder prices by about 7 per cent – the first hike in a year – while supplies are being controlled.

India invoked emergency measures last week to divert gas to priority areas, leaving the hospitality industry struggling to get sufficient supply.

Citing geopolitical disruptions to fuel shipments passing through the Strait of Hormuz, India’s oil ministry has urged refineries to ramp up LPG production and prioritise domestic use. Hospitals and schools have been given priority access to imported LPG supplies. 

The government's measures have increased local LPG output by 25 per cent, said Sujata Sharma, a joint secretary in the oil ministry. 

The ministry has also set up a panel to review requests for LPG from restaurants and other industries.

The National Restaurant Association of India (NRAI), which represents more than half a million restaurants, has warned of potential shutdowns. It is now in talks with the government and oil marketing companies to resolve the supply crunch.

“I am worried. This is the month of March … when we pay our advance taxes. We have license fees coming up,” said Pranav Rungta, vice president of NRAI Mumbai and co-founder of Mumbai restaurants Nksha and Otoki.

Still, Rungta said he remains hopeful that the pressure on restaurants may ease soon. 

This comes as India is reportedly exploring alternative LPG sources, including Australia and Canada, to stabilise supplies and keep kitchens running. 

 “Let's hope we can get through this. It's a war we are not involved in but we're being dragged into it right now, unfortunately,” Rungta added.