What is the story about?
The escalating conflict in West Asia has begun to place pressure on global shipping routes and fuel supplies, particularly around the strategically vital Strait of Hormuz.
The disruption is raising concerns about the availability and cost of Liquefied Petroleum Gas (LPG), a critical cooking fuel for restaurants and cloud kitchens across India.
As LPG supplies tighten and prices increase, the impact could extend from national energy security to the back-end infrastructure that powers food delivery services on platforms such as Zomato and Swiggy.
India ranks among the world’s largest consumers of LPG, and the country’s demand is supported heavily by imports. Roughly 60 per cent of India’s LPG requirement is sourced from overseas markets.
A large share of those imports originates from Gulf countries including Qatar, United Arab Emirates, Saudi Arabia and Kuwait. Close to 80-90 per cent of these shipments pass through the Strait of Hormuz before reaching Indian ports.
This narrow maritime passage, about 33 kilometres wide at its narrowest point, is one of the most important global energy transit corridors. Recent military activity in the region has increased uncertainty for vessels navigating the corridor.
Shipping companies have also been facing a steep increase in “war-risk” insurance premiums, which have risen to more than 10 per cent of the value of some ships.
While India has successfully diversified crude oil imports over the years —now sourcing oil from more than 40 countries — LPG imports remain concentrated in the Gulf region. This makes the country particularly vulnerable to disruptions along the Hormuz route.
Another factor contributing to the sensitivity of the supply chain is the relatively limited domestic inventory buffer. National LPG reserves typically cover only about two to three weeks of demand.
As a result, even short-term supply disruptions can quickly tighten the domestic market.
The tightening supply environment has already been accompanied by an increase in LPG prices. Following a ₹60 hike that came into effect on March 7, 2026, domestic cylinder prices have remained elevated across major cities.
As of March 16, 2026, the cost of a standard 14.2-kilogramme domestic cylinder stood at ₹913 in New Delhi and ₹912.50 in Mumbai.
Prices are higher in other parts of the country. A domestic cylinder costs ₹939 in Kolkata and ₹928.50 in Chennai. The price rises further to ₹965 in Hyderabad and crosses the ₹1,000 mark in Patna, where it is priced at ₹1,002.50.
Commercial cylinders used by restaurants and food vendors have also become more expensive. A 19-kilogramme commercial LPG cylinder currently costs ₹1,884.50 in New Delhi and ₹1,835.50 in Mumbai. Commercial LPG prices increased by ₹114.50.
For many consumers, food delivery platforms are associated primarily with mobile applications, delivery bikes and quick order fulfilment. However, behind the digital interface lies an extensive network of kitchens and restaurants where LPG remains the primary source of cooking energy.
Thousands of partner restaurants and cloud kitchens prepare meals ordered through delivery apps. In recent years, many quick commerce platforms have expanded their offerings to include hot meals, baked goods and ready-to-eat food items delivered within minutes.
These operations rely heavily on LPG cylinders for cooking. As a result, even modest increases in LPG prices can immediately affect the cost of preparing food.
Smaller kitchens that operate on narrow profit margins are particularly exposed to these fluctuations. Unlike large restaurant chains that may have the financial capacity to negotiate bulk energy contracts or diversify energy sources, independent kitchens often depend almost entirely on LPG.
Industry estimates indicate that around 85 per cent of independent restaurants operating on delivery platforms rely primarily on LPG cylinders for their cooking operations.
The operational impact of LPG price increases is expected to be most visible among cloud kitchens.
Cloud kitchens are facilities designed exclusively for delivery services rather than dine-in customers. Because they focus on high order volumes and quick preparation times, their profitability often depends on maintaining tight cost structures.
Many such kitchens operate with margins estimated at around 5-10 per cent. In this environment, even a modest increase in cooking fuel costs can significantly affect profitability.
If LPG prices remain elevated or supply becomes constrained, operators may have limited options to absorb the additional expense. Some kitchens may raise menu prices, while others could introduce additional service charges to offset higher cooking costs.
Restaurants may also respond by adjusting menus to prioritise dishes that require less cooking time or lower fuel consumption.
Also fertiliser plants, for example, which depend heavily on natural gas as a key input for production, are already operating below full capacity due to gas supply constraints. If these limitations continue, agricultural input costs could increase, potentially affecting the price of food ingredients used by restaurants and food vendors.
Analysts monitoring the food delivery sector say the impact of LPG supply disruptions could become visible in company performance metrics if the situation continues.
According to analyst estimates, food delivery platforms could experience a decline of around 3 per cent in quarterly revenue if the LPG supply disruption persists for about a week. The projected decline reflects the potential impact of restaurant closures or reduced kitchen operations on order volumes.
In recent quarters, the growth of the food delivery sector has been supported by increasing order volumes and expanding restaurant participation. Any interruption in restaurant operations could slow that growth momentum.
Early signals of strain are already emerging in delivery patterns. Some delivery workers associated with Swiggy and Zomato report a sharp decline in the number of orders they receive each day.
Because delivery workers on these platforms are typically compensated per order rather than through fixed salaries, a drop in order volume has a direct effect on their earnings. With no guaranteed income floor, even a few days of reduced activity can place significant financial pressure on workers and their families.
For consumers using food delivery apps, the consequences of rising LPG costs may not appear immediately. Instead, the changes may emerge gradually in the form of slightly higher menu prices, fewer promotional discounts, or the introduction of small surcharges on certain orders.
Food delivery companies have historically relied on discounts and promotional offers to drive customer demand and increase order frequency.
However, if vendors face rising costs, platforms may scale back some of these discount strategies to maintain financial sustainability.
Consumer behaviour could also shift if food prices rise noticeably, particularly among middle-income households that form a large segment of quick commerce users.
Quick commerce companies have built their business models around speed, convenience and affordability. Yet the sector has always operated on tight margins, meaning cost pressures anywhere in the supply chain can eventually influence pricing decisions.
In response to the emerging supply challenges, authorities have begun implementing measures designed to safeguard essential LPG availability.
The government has invoked provisions under the Essential Commodities framework to ensure that domestic consumers and critical institutions such as hospitals receive priority access to LPG supplies.
One of the steps introduced is a 25-day and 45-day inter-booking rule for domestic LPG cylinders in urban regions and rural areas respectively, which is intended to discourage excessive purchases and prevent hoarding during periods of uncertainty.
The Ministry of Petroleum and Natural Gas has also introduced regulatory changes aimed at preventing duplication of cooking fuel access. According to the ministry, consumers who already have piped natural gas (PNG) connections will no longer be permitted to retain, obtain or refill domestic LPG cylinders under the amended supply order.
The ministry also stated that government oil companies will not provide LPG connections or refills to consumers who already have PNG access.
These measures are intended to ensure that limited LPG supplies remain available for households and essential services at a time of crisis.
Also Watch:
With inputs from agencies
The disruption is raising concerns about the availability and cost of Liquefied Petroleum Gas (LPG), a critical cooking fuel for restaurants and cloud kitchens across India.
As LPG supplies tighten and prices increase, the impact could extend from national energy security to the back-end infrastructure that powers food delivery services on platforms such as Zomato and Swiggy.
How much is India dependent on LPG imports?
India ranks among the world’s largest consumers of LPG, and the country’s demand is supported heavily by imports. Roughly 60 per cent of India’s LPG requirement is sourced from overseas markets.
A large share of those imports originates from Gulf countries including Qatar, United Arab Emirates, Saudi Arabia and Kuwait. Close to 80-90 per cent of these shipments pass through the Strait of Hormuz before reaching Indian ports.
This narrow maritime passage, about 33 kilometres wide at its narrowest point, is one of the most important global energy transit corridors. Recent military activity in the region has increased uncertainty for vessels navigating the corridor.
Shipping companies have also been facing a steep increase in “war-risk” insurance premiums, which have risen to more than 10 per cent of the value of some ships.
While India has successfully diversified crude oil imports over the years —now sourcing oil from more than 40 countries — LPG imports remain concentrated in the Gulf region. This makes the country particularly vulnerable to disruptions along the Hormuz route.
Another factor contributing to the sensitivity of the supply chain is the relatively limited domestic inventory buffer. National LPG reserves typically cover only about two to three weeks of demand.
As a result, even short-term supply disruptions can quickly tighten the domestic market.
What is the cost of LPG cylinders in India?
The tightening supply environment has already been accompanied by an increase in LPG prices. Following a ₹60 hike that came into effect on March 7, 2026, domestic cylinder prices have remained elevated across major cities.
As of March 16, 2026, the cost of a standard 14.2-kilogramme domestic cylinder stood at ₹913 in New Delhi and ₹912.50 in Mumbai.
Prices are higher in other parts of the country. A domestic cylinder costs ₹939 in Kolkata and ₹928.50 in Chennai. The price rises further to ₹965 in Hyderabad and crosses the ₹1,000 mark in Patna, where it is priced at ₹1,002.50.
Commercial cylinders used by restaurants and food vendors have also become more expensive. A 19-kilogramme commercial LPG cylinder currently costs ₹1,884.50 in New Delhi and ₹1,835.50 in Mumbai. Commercial LPG prices increased by ₹114.50.
What is the role of LPG in India’s delivery economy?
For many consumers, food delivery platforms are associated primarily with mobile applications, delivery bikes and quick order fulfilment. However, behind the digital interface lies an extensive network of kitchens and restaurants where LPG remains the primary source of cooking energy.
Thousands of partner restaurants and cloud kitchens prepare meals ordered through delivery apps. In recent years, many quick commerce platforms have expanded their offerings to include hot meals, baked goods and ready-to-eat food items delivered within minutes.
These operations rely heavily on LPG cylinders for cooking. As a result, even modest increases in LPG prices can immediately affect the cost of preparing food.
Smaller kitchens that operate on narrow profit margins are particularly exposed to these fluctuations. Unlike large restaurant chains that may have the financial capacity to negotiate bulk energy contracts or diversify energy sources, independent kitchens often depend almost entirely on LPG.
Industry estimates indicate that around 85 per cent of independent restaurants operating on delivery platforms rely primarily on LPG cylinders for their cooking operations.
Why will high LPG prices hurt cloud kitchens most?
The operational impact of LPG price increases is expected to be most visible among cloud kitchens.
Cloud kitchens are facilities designed exclusively for delivery services rather than dine-in customers. Because they focus on high order volumes and quick preparation times, their profitability often depends on maintaining tight cost structures.
Many such kitchens operate with margins estimated at around 5-10 per cent. In this environment, even a modest increase in cooking fuel costs can significantly affect profitability.
If LPG prices remain elevated or supply becomes constrained, operators may have limited options to absorb the additional expense. Some kitchens may raise menu prices, while others could introduce additional service charges to offset higher cooking costs.
Restaurants may also respond by adjusting menus to prioritise dishes that require less cooking time or lower fuel consumption.
Also fertiliser plants, for example, which depend heavily on natural gas as a key input for production, are already operating below full capacity due to gas supply constraints. If these limitations continue, agricultural input costs could increase, potentially affecting the price of food ingredients used by restaurants and food vendors.
How is food delivery activity being affected?
Analysts monitoring the food delivery sector say the impact of LPG supply disruptions could become visible in company performance metrics if the situation continues.
According to analyst estimates, food delivery platforms could experience a decline of around 3 per cent in quarterly revenue if the LPG supply disruption persists for about a week. The projected decline reflects the potential impact of restaurant closures or reduced kitchen operations on order volumes.
In recent quarters, the growth of the food delivery sector has been supported by increasing order volumes and expanding restaurant participation. Any interruption in restaurant operations could slow that growth momentum.
Early signals of strain are already emerging in delivery patterns. Some delivery workers associated with Swiggy and Zomato report a sharp decline in the number of orders they receive each day.
Because delivery workers on these platforms are typically compensated per order rather than through fixed salaries, a drop in order volume has a direct effect on their earnings. With no guaranteed income floor, even a few days of reduced activity can place significant financial pressure on workers and their families.
What may consumers notice first?
For consumers using food delivery apps, the consequences of rising LPG costs may not appear immediately. Instead, the changes may emerge gradually in the form of slightly higher menu prices, fewer promotional discounts, or the introduction of small surcharges on certain orders.
Food delivery companies have historically relied on discounts and promotional offers to drive customer demand and increase order frequency.
However, if vendors face rising costs, platforms may scale back some of these discount strategies to maintain financial sustainability.
Consumer behaviour could also shift if food prices rise noticeably, particularly among middle-income households that form a large segment of quick commerce users.
Quick commerce companies have built their business models around speed, convenience and affordability. Yet the sector has always operated on tight margins, meaning cost pressures anywhere in the supply chain can eventually influence pricing decisions.
What next?
In response to the emerging supply challenges, authorities have begun implementing measures designed to safeguard essential LPG availability.
The government has invoked provisions under the Essential Commodities framework to ensure that domestic consumers and critical institutions such as hospitals receive priority access to LPG supplies.
One of the steps introduced is a 25-day and 45-day inter-booking rule for domestic LPG cylinders in urban regions and rural areas respectively, which is intended to discourage excessive purchases and prevent hoarding during periods of uncertainty.
The Ministry of Petroleum and Natural Gas has also introduced regulatory changes aimed at preventing duplication of cooking fuel access. According to the ministry, consumers who already have piped natural gas (PNG) connections will no longer be permitted to retain, obtain or refill domestic LPG cylinders under the amended supply order.
The ministry also stated that government oil companies will not provide LPG connections or refills to consumers who already have PNG access.
These measures are intended to ensure that limited LPG supplies remain available for households and essential services at a time of crisis.
Also Watch:
With inputs from agencies
