Mumbai Restaurants Raise Prices Up to 20% as LPG Shortage Drives Surge in Cooking Costs, Menus Cut and PNG Shift Accelerates

Running a kitchen in Mumbai has become increasingly challenging as rising fuel costs and an acute shortage of LPG cylinders have begun to significantly impact restaurants, bakeries and small eateries across the city.

After absorbing the financial burden for several weeks, many establishments have now started increasing menu prices, reducing offerings, and switching to alternative fuel sources to sustain operations.

According to industry representatives, the crisis has led to an increase of 10 to 20 per cent in food prices across a large number of restaurants in Mumbai.

The growing cost of vegetables, edible oil, packaging materials such as plastic containers used for deliveries, and the emergency purchase of induction stoveshaves collectively pushed up operational expenses for the hospitality sector.

Vijay Shetty, owner of Udupi Shri Krishna in Lower Parel and president of the Indian Hotel & Restaurant Association (AHAR), stated that the majority of restaurants across segments — including quick service restaurants (QSRs), vegetarian outlets, permit rooms and fine dining establishments — have already revised prices upwards.

The crisis traces back to a government circular issued on March 5 directing oil marketing companies to prioritise LPG supply for domestic consumers. The directive led to hoarding, black marketing and severe supply disruptions for commercial users such as restaurants and bakeries.

In the open market, the price of an LPG cylinder reportedly surged to Rs 4,000 or more, forcing businesses to either absorb the additional cost temporarily or scale down operations.

Many establishments faced sudden disruption as fuel supplies dried up. Restaurants, neighbourhood eateries, and bakeries — including those that had already transitioned away from traditional wood-fired ovens following court directives — found themselves struggling to keep their kitchens operational.

At Udupi Shri Krishna, a popular lunch destination for office workers in the Kamala Mills area, menu prices have increased by approximately 20 percent.

The price of a vegetable sandwich has risen from Rs 70 to Rs 90, while pav bhaji now costs Rs 15 more, cheese pav bhaji has become costlier by Rs 20, and uttapam prices have also increased by Rs 15.

Shetty noted that the restaurant currently receives only one or two cylinders per week, despite requiring at least one cylinder per day for regular operations.

Due to fuel limitations, the menu has been reduced by nearly 3 per cent, with items such as dosa temporarily unavailable.

Restaurant owners say the challenge is not only logistical but also economic. Many industry members feel that, despite being heavily relied upon by working populations for daily meals, the hospitality sector has not received the same recognition as essential services that it did during the COVID-19 pandemic.

In response to the fuel crisis, the government is encouraging restaurants in urban areas to shift from LPG to Piped Natural Gas (PNG), which offers a more stable long-term fuel supply.

To facilitate this transition, AHAR has set up assistance camps at its Wadala office, helping restaurant owners apply for PNG connections. According to Shetty, applicants are being assured priority access to LPG cylinders until their PNG connections become operational.

At the iconic Aram Vada Pav near Chhatrapati Shivaji Maharaj Terminus (CSMT), menu prices are expected to increase by 7 per cent starting April 13. Owner Kaustubh Tambe stated that the cost of cooking oil has risen by Rs 100 to Rs 125 in just one month, while coal — adopted as an alternative fuel — has increased from Rs 38 to Rs 60 per unit.

The establishment received only four cylinders last week despite requiring two cylinders per day. As a result, certain menu accompaniments such as fried green chillies, upma and upvas missal have been temporarily discontinued.

The supply crunch has also affected legacy bakeries. The 118-year-old American Express Bakery continues production using electric and diesel-powered ovens, but items requiring gas for fillings — such as puffs and sandwiches — have been impacted due to the limited supply of one cylinder every 20 to 25 days.

The bakery has reduced production volumes by about 30 percent and is likely to increase prices of certain items by 10 to 15 percent between mid and late May.

Similarly, Vienna Bakery in Vakola, a 67-year-old neighbourhood establishment, is holding prices steady until April 15 but anticipates an increase of 10 to 15 percent thereafter.

The bakery has been operating on a single LPG cylinder since the crisis began, while facing rising input costs for fuel, edible fat, cooking oil and packaging materials.

At Shree Thaker Bhojanalay, operations had briefly been suspended at the peak of the crisis but have now resumed using a combination of LPG cylinders, coal and induction cooktops.

Owner Gautam Purohit said that rising prices of milk, vegetables, coal and other raw materials are placing pressure on margins, and a price revision may soon become unavoidable.

Jhama Sweets in Kalbadevi also temporarily halted production before switching to diesel-powered furnaces and induction cookers.

Traditional items such as jalebis, which require sustained high heat, are now being prepared using induction equipment. Owner Vicky Lulla indicated that while prices have not yet been increased, continued cost escalation may force revisions in the near future.

At New Edward Bakery in Fort, operations have stabilised somewhat after receiving three LPG cylinders recently. The bakery is also supplementing cooking operations with electric stoves.

However, retail prices have already seen an increase. For example, the price of ladi pav has risen from Rs 12 to Rs 15, while khari toast and butter products have also become costlier.

Industry body representatives estimate that since the onset of the crisis in late February, operating costs in the hospitality sector have increased by approximately 20 per cent.

According to industry spokesperson Pradeep Shetty of the Hotel and Restaurant Association of Western India (HRAWI), many establishments now have limited options other than passing on a portion of the cost burden to consumers.

Despite these challenges, some restaurants are managing through operational adjustments. Hotel Sadanand reported receiving three cylinders last week and expects two more shortly.

With a PNG connection application already submitted, the establishment is currently managing operations with 20 to 30 per cent of its usual LPG consumption. The restaurant has gradually expanded its thali offerings again, indicating early signs of recovery.

At Lucky Restaurant, owner Mohsen is receiving only two to four cylinders daily compared to a requirement of eight to ten cylinders. The establishment has adopted a mixed fuel approach — using coal for gravies and biryani, while LPG is reserved for frying, tea, coffee and Chinese cuisine.

The menu currently operates at around 70 per cent capacity, depending on fuel availability. However, delays in PNG connection approval continue to remain a concern, as repeated requests for site inspection have yet to receive a response.

Overall, the LPG supply disruption has triggered operational challenges across Mumbai’s food industry, forcing restaurants and bakeries to revise prices, reduce menu offerings, and adopt alternative fuel solutions.

The sector is now increasingly looking towards PNG connections as a long-term solution to ensure uninterrupted operations and cost stability.