Commercial LPG Shortage: How Does It Impact Food Aggregators Zomato and Swiggy?

Amid panic booking of LPG and patterns of hoarding reported by the central administration, a near-term hiccup if shortages persist through March are expected to impact order volumes of food delivery majors such as Zomato, and Swiggy.

"Reduced menus, limited cooking hours or temporarily shut kitchens at some restaurants may limit order availability on platforms, leading to temporary moderation in 4Q FD order volumes," according to a Motilal Oswal brokerage note.

“Platform GOV YoY growth for Zomato stood at ~15.9%/16.2%/18.6%/21.1% over the last four quarters, while Swiggy reported ~17.6%/18.8%/18.8%/20.5% YoY growth over the same period,” it said. 

The brokerage house estimates "Zomato’s GOV growth at ~15.3%/18.0% in FY26/27E and Swiggy at ~20.2%/17.3%, supported by gradual market share gains and continued expansion across cities."

India's LPG Usage Intensity and Buffers

Inventory buffers across restaurants tend to be limited. Most kitchens maintain 2-6 days of cylinder inventory (see exhibit 4), given storage constraints and frequent delivery cycles.

As a result, any supply disruption can begin to impact operations within 48-72 hours. Meanwhile, restrictions such as storage of LPG above 100kg (about five 19kg cylinders) requiring licenses and compliance with additional safety requirements, making it impractical for small restaurant outlets.

Also Read: India Likely To Pause US Trade Deal as Trump Launches New Trade Probe

A small restaurant typically consumes 1-2 commercial cylinders (19kg) per day, mid-size restaurants 3-5 cylinders, and large hotel kitchens 6-10 cylinders daily, depending on scale and operating hours.

Currently, Indian restaurants are 80% dependent on LPG cylinders, and 20% on PNG. On other hand, the average LPG inventory buffer for hotels and restaurants is not more than one week.

On the other hand, "household cooking dominates LPG consumption. Industry estimates suggest "85-90% of demand comes from residential use, while commercial consumption (restaurants, hotels, catering) accounts for 8-10%, implying 2-3MMT annual demand from the food-service ecosystem," as per a Motilal Oswal report.