The Middle East conflict has choked commercial LPG supply chains, pushing India’s 5 lakh restaurants — and the millions who depend on them — to the brink of shutdown.
India’s restaurant industry is staring down a crisis that has nothing to do with food quality, customer footfall, or economic slowdown — it stems from a conflict raging thousands of kilometers away.
The ongoing war in the Middle East has disrupted global energy supply chains so severely that commercial LPG cylinders — the lifeblood of Indian kitchens — are becoming dangerously scarce.
The Crisis at a Glance
According to Sagar Daryani, President of the National Restaurant Association of India (NRAI) and co-founder and CEO of Wow! Momo Foods, as many as 50 to 60 per cent of India’s approximately 5 lakh restaurants could be forced to shut their doors within the next two to three days if the supply of commercial LPG cylinders is not restored.
This is not merely a supply chain hiccup. It is a full-blown crisis that threatens the livelihoods of millions — from restaurant owners and chefs to delivery personnel, suppliers, and daily wage workers who depend on the food service ecosystem.
The Middle East Connection
India imports a significant portion of its LPG from the Middle East — particularly from Saudi Arabia, Qatar, and the UAE. Any geopolitical disruption there becomes a direct threat to India’s domestic supply, and that is exactly what is happening right now.
The ongoing conflict, roughly 3,000 km from India’s shores, has disrupted shipping lanes, slowed tanker movements, jacked up freight costs, and created widespread uncertainty among energy importers. Insurance premiums for cargo ships passing through conflict-adjacent waters have surged.
Some suppliers have scaled back operations or delayed deliveries — triggering a cascading shortage felt at the most ground level: the kitchen of a neighborhood restaurant.
Panic, Hoarding & Black Marketing
What makes the current situation particularly dangerous is not just the actual shortage — it is the fear of shortage, which is driving irrational behaviour across the supply chain.
Daryani noted that ambiguous narratives around potential restrictions on commercial LPG are fuelling panic buying and hoarding. Distributors are holding back stock, middlemen are inflating prices, and smaller restaurants are being squeezed the hardest. A cylinder that once cost a certain price is now being sold at 1.5 times its usual rate on the black market — an unsustainable cost for establishments already operating on razor-thin margins.
Who Gets Hit the Hardest?
While large chains and QSR brands may absorb short-term shocks or pivot to alternative fuel sources, it is the small and medium restaurants — the dhabas, the tiffin centres, the neighbourhood eateries — that face existential risk.
Impact of 2-3 days of Shutdown-
- Spoilage of perishable items
- Loss of customer in long run
These establishments typically operate on margins of just 5 to 15 per cent. They cannot afford to pay black market prices for LPG, nor do they have the infrastructure to quickly switch to piped natural gas or induction-based cooking.
NRAI’s 5 Demands to the Government
- Clarify policy stance on commercial LPG and dispel rumours of a ban or restriction fuelling panic buying.
- Ensure uninterrupted LPG supply to the food service sector, treating it as an essential service.
- Crack down on black marketing and hoarding by distributors and middlemen exploiting the crisis.
- Expedite alternative supply routes and diversify LPG import sources beyond the Middle East.
- Provide short-term relief to small restaurant owners via subsidised cylinders or emergency allocations.
Key Figures
- 5.99L cr India’s restaurant sector value
- 50% of India’s LPG is imported from UAE
- 5-15% profit margin for SME
The current crisis presents both a warning and an opportunity.
If India acts decisively now — not just to resolve the immediate shortage, but to structurally reduce its dependence on imported LPG for commercial cooking — it can prevent future conflicts from walking into Indian kitchens uninvited.
