Hyd Restaurants Facing Crisis
The restaurant industry in Hyderabad is grappling with the aftermath of a significant surge in commercial LPG prices, which has sparked fears of closures, job losses, and increased dining expenses. The price of a 19-kg commercial LPG cylinder in Hyderabad has soared from Rs 2,321 to Rs 3,315 due to a nationwide hike of Rs 993, marking the steepest increase in recent years. Smaller 5-kg cylinders have also seen a price hike, rising from Rs 673 to Rs 914.50. Restaurant owners are expressing concerns about the sector, which has been operating at losses of 35-40% for months, with many establishments barely staying afloat.
Sandeep Balasubramanian, president of the National Restaurant Association of India, Hyderabad chapter, warned that more closures and thousands of job losses are imminent if the situation persists. He also highlighted the escalating black-market prices of LPG, which were already ranging from Rs 4,000 to Rs 7,000 before the recent hike. Moreover, the industry is under pressure from food delivery platforms to offer heavy discounts while service charges have disappeared entirely. This confluence of challenges has made it unsustainable for restaurants to continue operations.
Abhik Mitra, managing director and CEO of Paradise Food Court Pvt Ltd, emphasized that unlike other cost increases, the LPG price surge cannot be immediately passed on to customers, risking a reduction in footfall. With the average restaurant consuming between 100-150 commercial cylinders per day, the latest hike is expected to significantly elevate monthly operating costs and strain margins. In response, many restaurants have begun overhauling kitchen operations by shifting to alternative cooking methods such as wood, electricity, grills, tandoors, and induction cooking. Menu redesigns are also underway to reduce gas-intensive cooking and promote oven and grill-based dishes. However, these adjustments come with their own challenges, as highlighted by industry professionals.
For instance, Zain Rehmat-Ullah of Imli Sarai shared that the restaurant has almost entirely ceased reliance on LPG, while Ayush Agrawal of a popular pub in the city mentioned the exploration of alternatives such as PNG. However, these alternatives come with increased input costs, posing further challenges for the industry. The impact of the LPG price hike is not limited to restaurant kitchens, as it has led to reduced working hours and layoffs across the hospitality and delivery ecosystem, prompting reverse migration among workers.
The Telangana Gig and Platform Workers Union highlighted the severe impact on cloud kitchens, roadside eateries, and workers in mid-sized restaurants. As a result, they have advised delivery partners to temporarily shift to other e-commerce platforms. The crisis has also led to longer waiting periods and reduced customer traffic, amplifying the challenges faced by restaurant operators. With the situation showing no signs of immediate relief, the industry is bracing for a tumultuous period ahead.
