Restaurants Unlikely to Cut Prices Despite ₹180 LPG Cut, Owners Cite Rising Ingredient Costs

Hotels and restaurants across India have welcomed the reduction in commercial LPG cylinder prices by approximately ₹180, but say the cut is too small to lower menu prices. Owners are calling for prices to return to pre-Ukraine war levels, as other costs have risen significantly.

On Wednesday, oil-marketing companies reduced the price of a 19.2-kg commercial LPG cylinder by ₹177 in Bengaluru, ₹183 in Chennai, and similar amounts elsewhere. However, industry representatives said the reduction is insufficient.

“We received a ₹177 cut when we expected ₹500,” said G.K. Shetty, president of the Karnataka State Hotels’ Association. He added that crude oil prices have nearly returned to February 2022 levels, justifying a larger rollback. Shetty expects another cut after July 15 and hopes the cylinder price will settle at ₹2,000 by month-end.

M. Ravi, president of the Chennai Hotels Association, described the reduction as “a little relief, like a summer rain.” He urged the government to restore prices to pre-war levels, noting increases in key ingredients like rice and dal.

Sathish D. Nagasamy, managing director of Dindigul Thalappakkatti, said LPG prices have not normalised. “The prices of chicken and other ingredients have also increased. Only when these costs come down will the reduction truly benefit the hotel industry,” he said.

Mumbai restaurant owners said the reduction “hardly makes any difference.” One owner noted that with an increase of about ₹1,300 per cylinder, a ₹183 cut is negligible. He also pointed to ongoing losses during the pandemic and the uncertain West Asia conflict.

Jegan Damodarasamy, CEO of Sree Annapoorna Group in Coimbatore, highlighted that LPG prices rose 100% but the reduction is only 10%. He also mentioned increased transport and packaging costs due to the war. Asked about rolling back menu prices if LPG falls to ₹2,000, he said, “Once that happens, we have to see how quick and how much we can do. We can’t say anything now.”

Piyush Kankaria, chairman of the National Restaurant Association of India’s Kolkata chapter, called the cut a “much-needed relief,” as fuel accounts for up to 15% of kitchen expenses. He said it eases pressure on operating costs and helps keep menu prices stable, which is crucial for a price-sensitive market like Kolkata.

Sudesh Poddar, president of the Hotel Restaurant Association of Eastern India, welcomed the move but reiterated the demand for pre-war LPG prices.

Despite the price cut, most restaurant owners said there will be no immediate change in food prices. They argue that multiple cost factors, including ingredients and transportation, need to stabilise before menu prices can be revised downward.