Kashmir’s Tourism Industry Struggles Under Triple Burden of Fuel Inflation, LPG Shortages, and Past Terror Attack

Srinagar, May 18: A fresh surge in petrol and diesel prices has delivered a sharp blow to Kashmir’s tourism-dependent economy just as the peak summer season begins, compounding challenges from last year’s Pahalgam terror attack and an ongoing LPG supply crunch linked to the Iran–US conflict.

India’s state-run oil marketing companies raised petrol and diesel prices by around Rs 3 per litre on May 15, 2026 ; the first increase in four years, driven by elevated global crude costs amid disruptions in the Strait of Hormuz. “The impact has been immediate. Airfares to the Valley have soared, with tickets that once cost Rs 9,000 now ranging between Rs 13,000 and Rs 16,000, and minimum fares until early June hovering at Rs 10,000. Road transport costs have also climbed sharply. Taxi fares for a full day have risen from Rs 3,500 to Rs 4,500, while bus operators are passing on higher fuel expenses to passengers,” said an industry worker.

“The rising prices of petrol and diesel have increased my expenses. I have to repay my loans and run my household. Obviously, the increased prices will impact tourists,” said taxi driver Rafiq Ahmed. Hoteliers and houseboat owners, already operating on thin margins, report mounting losses. Many had locked in bookings at pre-hike rates and cannot pass on the additional costs for fuel, food, beverages, and amenities.

“First the Pahalgam attack and then the LPG crisis due to the Iran–US war had already reduced profits. Now with the increase in diesel and petrol prices, the cost of everything has gone up. We are incurring huge losses,” said Gul Farooq, a hotel owner.

Meanwhile, the scars of previous setbacks remain fresh as the sector is still recovering from the April 22, 2025, Pahalgam attack in Baisaran Valley, which killed 26 tourists, mostly Hindus, and triggered a sharp drop in visitor numbers last year.

“While early 2026 data showed promising signs of revival, with over 4.23 lakh tourists visiting in the first four months; the combined effect of security concerns, LPG shortages, and now higher fuel costs threatens to dampen the crucial summer influx during school vacations,” said a tourism official while wishing anonymity.

Industry voices warn that sustained high fuel costs could lead to reduced arrivals, widespread cancellations, and potential job losses across hotels, transport, handicrafts, and allied sectors. “Tourism, alongside agriculture and horticulture, forms the backbone of Kashmir’s economy. If costs remain unchecked, the Valley risks sliding toward deeper economic distress,” said a worker in the handicrafts sector.\\

However, the Valley’s pleasant summer climate and natural beauty could still lure families if costs are managed. Yet with inflation already burdening households nationwide, Kashmir risks becoming less affordable for middle-class travellers.
Stakeholders urge swift policy measures to shield one of India’s most iconic tourist destinations from further economic strain.
 

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