Big relief for hotels, restaurants: Commercial LPG cylinder price slashed by Rs 209

New Delhi: Business owners of hotels, restaurants, and eateries have received fresh relief as the prices of commercial LPG cylinders have been reduced once again. The price of a 19-kg commercial LPG cylinder has been cut by Rs 209, bringing the new price in Kolkata to Rs 2,872.50. The revised rates came into effect on August 1.

While this reduction brings significant cost relief to the hospitality and food industry, the prices for domestic cooking gas remain unchanged at Rs 968 in Kolkata.

What led to the fluctuation in gas prices?

The recent rate adjustments follow months of volatility in international LPG markets caused by geopolitical tensions:

• Middle east conflict impact: Following geopolitical conflicts involving Iran, the US, and Israel earlier this year in February, ship movements through the vital Strait of Hormuz were disrupted.

• Import costs soared: The supply constraint in international markets significantly increased the import costs for Indian oil marketing companies (OMCs).

• Record high prices: Due to continuous hikes, the price of a 19-kg commercial cylinder—which was once under Rs 2,000—peaked at Rs 3,255.50, putting severe financial strain on the food service sector.

To tackle the crisis, the Union Government directed domestic refineries to boost LPG production by increasing the use of propane and butane. As conditions in the Strait of Hormuz began normalizing last month, the government initiated price rollbacks:

1. Last month’s cut: Price reduced by Rs 174, bringing the cost down to Rs 3,081.50 in Kolkata.

2. Current cut (August 1): Price reduced further by Rs 209, bringing the current cost down to Rs 2,872.50.

Will food prices in hotels and restaurants drop?

In early May, commercial LPG prices surged by nearly Rs 1,000 in a single hike. Consequently, many hotels, restaurants, and street food vendors were forced to increase their menu prices to absorb the rising operational costs.

With two consecutive rate cuts now easing the financial burden on traders, the major question remains whether food outlets will pass on these savings to customers by reducing menu prices in the coming days.