Restaurants to raise prices as govt effects largest LPG rate increase

Mumbai: Shock and anxiety gripped restaurants as well as roadside eateries in Mumbai on Friday as the Central govt effected the single highest hike of nearly Rs 1,000 in commercial LPG prices. Industry experts say petrol and diesel could be next in line. A 19 kg gas cylinder which earlier sold for Rs 2,031 now costs Rs 3,024 — Rs 993 more. The 'Chhotu' domestic 5 kg cylinder used by migrant workers and small vendors rose by Rs 241, from Rs 596.50 to Rs 838. So far, the common 14.2 kg domestic LPG cylinder remains unchanged at Rs 912.50.

AHAR president Vijay K Shetty said menu prices may soon rise by 15%. He told TOI the fuel hike was "a bullet fired by govt at hoteliers from point blank range," calling it the third painful hike since the Iran conflict erupted Feb 28. Some eateries said alternatives like piped gas, induction and coal remain scarce and expensive.





Aarav Shetty, owner of Udupi Shrikrushna opposite Kamla Mills Compound and Nutan Bar and Restaurant at Reay Road, said he and many of his hotel-owner friends will be increasing menu prices by at least 20% from Saturday. "We have been absorbing prices since the war time which was approximately almost Rs 1,500 on each cylinder. Now this latest rise will not be sustainable," he added.

The owner of a 'Barah handi' restaurant in Kumbharwada said, "We use LPG cylinders to cook lunch for daily wage workers. These poor customers are worst hit. We will have to increase prices but they cannot afford to pay higher rates twice in two months."

Mohsen Husaini of Lucky Restaurant, Bandra, said, "I was expecting a rise but not to this extent. With cylinder prices increasing by about Rs 1,000, it is becoming unsustainable, especially considering my daily requirement of 10-12 cylinders. I have managed to hold prices steady for 1.5 to 2 years, but now I am left with no choice but to increase rates by at least 10%."

Parvez Patel of Parsi restaurant Ideal Corner at Fort, said, "The Rs 1,000 increase is unbearable. We are helpless. Fine dining restaurants may have a huge (profit) margin but we value-for-money joints are suffocating."

Hotelier Kamlesh Barot of Revival Restaurants said, "We have no other choice left but to raise our menu prices and pass on a bit of the burden to diners."

Ironically, old style bakers and confectioners made a recent switch from woodfire or coal to LPG and piped gas under BMC orders. Confectioner Salahuddin Khan, owner of Kwality Bakers, said, "The LPG increase will directly raise production costs for a bakery, making price revisions likely. Even for PNG-based manufacturers like us, costs have increased significantly. The Bread Manufacturers' Association will explore ways to minimize the burden on consumers while maintaining operational viability."

AHAR's Shetty said, "From fast food to a fine dine family restaurant, everyone has been badly impacted by the latest hike, and this will definitely not be rolled back during war time." He said hoteliers will not be able to absorb the hike unlike the past two times. Moreover, he said, commercial LPG distribution was still restricted to 70%, not available 100%.

Oil marketing companies attributed the LPG increase to "turmoil in global energy markets". And a senior member of the Petrol Dealers' Association said diesel may be next in line.

Pradeep Shetty, spokesperson, Hotel And Restaurant Association (Western India, HRAWI, said, "The latest increase of Rs 993 after Rs 195.50 in April and Rs 144 in March, makes a staggering hike of Rs 1,332.50 within three revisions. Our sector is struggling with supply disruptions, reduced operational capacity and weakened cash flows leading to curtailed operations, limited menus, even temporary closure. Hotels and restaurants are among the largest consumers of commercial LPG. This hike will accelerate closures and job losses. A 10-15% hike in prices is imminent. Even that may not be enough to absorb the impact. We urge the govt to roll back this increase."
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