Rising LPG Costs Force Small Businesses to the Brink: Hoteliers, Bakers, Wedding Halls Demand Price Cut
Despite crude oil prices falling back to pre-war levels, the cost of commercial liquefied petroleum gas (LPG) remains exorbitantly high, pushing small businesses such as hotels, bakeries, tea shops, and wedding halls to the edge. Industry associations have now demanded an immediate rollback in prices, warning that many establishments are on the verge of closure.
International benchmark Brent crude has dropped to approximately USD 72–73 per barrel, while US crude has fallen below USD 70 per barrel. However, the price of a 19 kg non-domestic LPG cylinder, which stood at ₹1,899.50 on February 1, has skyrocketed to ₹3,283 as of June 1—a staggering increase of over 72% in four months.
M. Venkadasubbu, president of the Tamil Nadu Hotels Association, highlighted the severe impact on the hospitality sector. “Hotels are finding it very difficult to manage LPG at such rates. It is eating into our margins. Not everyone can convert to other fuels. We could increase food prices only by 10%, as a higher hike would lead to losing customers. Firewood is driving away long-time staffers since the working environment is not conducive to them. Around 10% of hotels and small eateries have closed down. But those who continue to function have heavy loan burdens,” he said.
The Tamil Nadu Bakers Federation echoed similar concerns. Its president, P. P. Subramaniam, noted that the baking industry relies on a mix of energy sources—electric, gas, diesel, and wood-fired ovens. “We are already burdened by raw material prices. In such a situation, a reduction in LPG and diesel prices would help industry members remain afloat,” he said.
Tea shop owners are also struggling. T. Anandan, president of the Chennai Metropolitan Tea Shop Owners Association, said they have submitted a petition to IndianOil but received no response. “At present, tea shops are barely managing to run their outlets by hiking tea and coffee prices. We cannot hike too much, since tea and coffee are consumed by ordinary people. We have told our members to ensure quality products,” he said.
The Tamil Nadu Marriage Hall Owners Association reported that its members have faced extreme difficulties, sometimes paying up to ₹10,000 per cylinder to avoid cancelling auspicious wedding events (muhurthams). “Though a few caterers asked us to allow the use of domestic cylinders, we could not, as that would amount to illegal diversion. These past few months have been very tough. A reduction of even ₹1,000 per cylinder would come as a great relief for us,” said state president A. John Amalraj.
The associations have urged the Central government to reduce prices of petrol, diesel, and commercial LPG, arguing that the current pricing structure is unsustainable for small enterprises that are vital to the economy and employment.
