Bengaluru: Eating out is set to become costlier as the Union ministry of petroleum and natural gas has raised commercial LPG prices by a steep Rs 991 from Friday. A 19 kg commercial cylinder will now cost Rs 3,153 in Bengaluru, reflecting an increase of Rs 993.
Hoteliers Announce Price Hike
Speaking to TOI, Bengaluru Hoteliers' Association president P C Rao stated that restaurant owners were left with no option but to increase menu prices by 10%. Hoteliers noted that commercial LPG prices have been increased thrice in the last 60 days, with the total hike amounting to Rs 1,388.
Impact on Hospitality Sector
Restaurant owners in the city voiced concern, saying a combination of factors is creating strong headwinds for the hospitality sector, putting its future in jeopardy. According to the National Restaurant Association of India (NRAI), commercial LPG currently accounts for about 10% of food cost at restaurants. This could rise to 12-15% following the latest price hike.
NRAI president Sagar Daryani told TOI: "The exact impact will depend on the extent to which prices stabilise over the next few weeks." Several restaurants are now evaluating a gradual shift towards induction-based cooking systems to reduce dependence on LPG, although this will require additional investments in power infrastructure and take time to implement.
Rameshwaram Cafe co-founder Raghavendra Rao said LPG currently accounts for about 4-5% of overall operating costs, which could now rise to 6-7%. Despite the increase, the cafe does not plan to raise menu prices immediately.
Cascading Effect on Small Eateries
Bengaluru has around 30,000 hotels. The impact of the hike on small eateries will be severe, hoteliers warned. Terming the hike abnormal, P C Rao said: "As soon as the elections were over, the government gave us a big blow. It may think commercial cylinder prices do not impact the common man directly, but it will certainly have a cascading effect. This move will also affect hostels, PGs and canteens. Increasing prices of food items is not our intention, but it is unavoidable." He added that the association will send a representation to the Centre, seeking a reduction in GST on commercial LPG from 18% to 5% as a relief measure.
Alternative Fuel Sources Unviable
BHA secretary Veerendra Kamat said even as hoteliers were looking for alternative fuel sources, most were not practical. "The electricity tariff was increased in April. We are also required to pay arrears in power tariffs from March 2024 to April 2026, which may run into lakhs. Switching to solar power is impossible as most restaurants operate from rented premises," he said. Even though shifting to piped gas is an option, pipelines have not yet been laid in Bengaluru's Central Business District, he added.
Revised Prices of Commercial LPG
- 5 kg FTL: Rs 872 (up by Rs 241)
- 19 kg commercial cylinder: Rs 3,153 (up by Rs 993)
- 35 kg industrial cylinder: Rs 5,809 (up by Rs 1,825.5)
- 47.5 kg industrial cylinder: Rs 7,878.5 (up by Rs 2,477.5)
Industry Reactions
Sagar Daryani, President of NRAI, said: "Quite a bummer to be honest. Prices went up by 10% about a month ago. Now, another 50% more. So that's technically a 60% jump from the base in March. Such high inflation on fuel cost will lead to increase in food cost and restaurants will be pushed to pass this on to the end consumers."
Raghavendra Rao, Co-founder of Rameshwaram Cafe, added: "LPG currently accounts for about 4-5% of our overall operating costs, which could rise to 6-7%. Despite the increase, Rameshwaram Cafe does not plan to raise menu prices immediately. We are evaluating a gradual shift towards induction-based cooking systems."
