Startups Hit by Gas Shortages

The current disruption stems from escalating geopolitical tensions in West Asia, which have impacted energy infrastructure and key shipping routes like the Strait of Hormuz. This has led to a halt in liquefied natural gas (LNG) production in Qatar and disruptions in shipments, directly affecting India, which imports roughly half of its natural gas. In response to potential shortages, the Indian government directed oil marketing companies on March 5 to prioritize the supply of LPG to domestic consumers. This move, however, has severely impacted the availability of commercial gas cylinders that are essential for the restaurant and hospitality industry. The National Restaurant Association of India (NRAI), representing about half a million restaurants, has warned of "catastrophic closures" if the commercial LPG supply is not restored. The situation is critical in several cities, with restaurant associations in Mumbai, Bengaluru, and Kolkata reporting that many eateries could shut down within days. In Mumbai, an estimated 20% of hotels and restaurants have already been forced to close. This directly impacts the operations of food-tech startups. Food delivery platforms are fundamentally dependent on a functioning restaurant ecosystem. As kitchens close, the availability of restaurants on these platforms is expected to decline, which could affect their revenues. The crisis has also led to a sharp increase in the price of commercial LPG cylinders. Prices were hiked by ₹114.5 per 19-kg cylinder from March 7, following an earlier increase, contributing to rising operational costs for an industry already dealing with inflation in other raw materials. Some restaurants are already adapting by altering their menus and discontinuing slow-cooked dishes to conserve gas. The industry is anxiously awaiting government intervention to clarify supply restrictions and stabilize the situation, as prolonged disruption threatens widespread economic impact on the food service sector.