Commercial LPG Shortage Hits Major Metro Cities, 20% Hotels And Restaurants Shut In Mumbai

A growing commercial gas crisis has begun to hit the hospitality industry in major Indian cities, with restaurant and hotel associations warning of widespread closures if fuel supplies are not restored soon. In Mumbai, industry representatives say that around 20 per cent of hotels and restaurants have already shut down due to the non-availability of gas, and more establishments could close in the next one to two days if the situation does not improve.

The Indian Hotel and Restaurant Association, which represents the hospitality sector in Maharashtra, has written to Union Petroleum and Natural Gas Minister Hardeep Singh Puri expressing deep concern over a recent government order restricting LPG and PNG supply.

In its letter dated March 6, 2026, AHAR Association referred to the government’s order M-13017(11)/2026-LPG-PNG issued on March 5, which directs public sector oil marketing companies to ensure that LPG procured is supplied solely to domestic consumers.

The association warned that this restriction could severely affect restaurants and hotels, which depend heavily on piped natural gas (PNG) for daily cooking operations. AHAR said that any disruption in supply would have an immediate and serious impact on businesses and workers across the hospitality sector.

AHAR represents nearly 8,000 restaurants, permit rooms and hotels across Maharashtra through 65 affiliated associations, including small and medium enterprises as well as star-category establishments.

Indian Hotel and Restaurant Association in its letter to the Union Minister has also stressed on how the hospitality industry plays a major role in employment in the state. According to AHAR, the sector provides around 40 lakh direct jobs and nearly 160 lakh indirect or self-employed livelihoods in Maharashtra. The association cautioned that a complete stoppage of PNG supply could disrupt the income of millions of workers and affect essential daily services provided by restaurants and hotels.

It also stated how the restaurants also serve a large working-class population, including migrant workers from various states who depend on eateries for daily meals and affordable food options.

Industry Seeks Minimum Gas Supply

While acknowledging that the industry understands that the current situation is influenced by global geopolitical factors, the association assured that the industry could still operate with up to a 25 per cent reduction in PNG supply. However, it stressed that a 100 per cent curtailment or complete stoppage would make it practically impossible for hotels and restaurants to function.

“While we understand that current situation is beyond control due to global geopolitical factors, any stoppage of PNG supply will have a severe and immediate impact on the entire hospitality industry. Restaurants & Hotels are largely dependent on PNG for their daily cooking operations, and any disruption would seriously affect the livelihoods & revenue of all the stake holders,” the letter stated.

The association has therefore requested the central government’s intervention to ensure that restaurants and hotels continue receiving at least a minimum level of PNG supply to keep operations running and protect workers’ livelihoods.

Chennai Also Faces Commercial LPG Shortage

A similar crisis is unfolding in other cities like Bengaluru, Kolkata and Chennai, where the hotel industry is also warning of potential shutdowns due to a shortage of commercial LPG cylinders. 

Representing more than 10,000 hotels and eateries in Chennai, the local hotel association has said that supply of commercial LPG cylinders has been reduced by nearly half, creating serious operational difficulties for food businesses.

In a letter sent to the central government, the association stated that the disruption in LPG supply would immediately affect food preparation in restaurants and hotels. It has also demanded an uninterrupted supply of commercial LPG for usage in restaurants and food industries. 

“We request you to please represent our case on an urgent basis, as the food industry works on a 24x7 basis for many hospitals who require the food to be supplied on time besides IT Parks, students at college hostels, train and business travellers will all be affected, if the supply of commercial LPG is hindered. There are also banquet bookings undertaken by many star hotels and restaurants which will also be affected,” The Chennai Hotels Association wrote in its letter to the Prime Minister.