The US and Israel’s military strikes on Iran have caused disruptions to shipping in the Strait of Hormuz, severely impacting the global energy supply chain. Multiple industries in India are facing a natural gas supply crisis, prompting the Indian government to issue emergency measures, prioritizing gas supply for key industries and daily household use—but this does not extend to the restaurant sector. Media reports say a large number of restaurants may be forced to close.
India has a daily domestic natural gas demand of about 195 million standard cubic meters, with about half reliant on imports. India is currently the world’s fourth-largest liquefied natural gas (LNG) importer and the second-largest liquefied petroleum gas (LPG) importer, with most of its imports coming from Middle Eastern countries. However, after the United States and Israel launched military strikes against Iran on February 28, shipping lanes in the Strait of Hormuz have been effectively closed. Gas exports from Gulf countries have plummeted, especially after India's largest LNG supplier, Qatar, announced earlier this month that it was halting LNG production due to facility attacks, dealing a direct blow to India.
The Indian Ministry of Petroleum and Natural Gas issued a directive on the 10th, stating that due to the “ongoing Middle East conflict causing disruption to LNG transport through the Strait of Hormuz,” in order to ensure “fair distribution” and continuous supply for “priority sectors,” the government would guarantee LNG supplies according to the average gas consumption over the past six months and actual supply capacity, giving different priority levels to different users.
Among these, top priority is given to household gas use, motor fuel, and LPG production, demanding 100% supply protection; fertilizer plants will receive 70% of their daily supply; tea production, manufacturing, and other industrial users will maintain 80% supply; small industrial and commercial users are guaranteed 80% supply; chemical plants and power plants will face varying degrees of supply restrictions.
The Ministry of Petroleum and Natural Gas also issued another directive late on the 9th, requiring LPG supply to prioritize household needs.
Some industries not included in the “priority sectors” are struggling. Some ceramics and brick factories have already complained about insufficient gas supply and are concerned about how this will affect production.
Indian restaurants and hotels have been hit hardest, as cooking gas is primarily LPG. Belt-Miller, which operates more than 100 Mexican-style restaurant chains throughout India, said its restaurants’ LPG stocks will only last for two days, forcing them to use it sparingly, with some outlets switching to induction cookers for food preparation.
The National Restaurant Association of India, representing more than 500,000 restaurants, sent a letter to relevant government departments on the 9th, saying that following the government’s “supply allocation” directives, LPG suppliers across India have indicated they will likely suspend supply to the restaurant industry. “The restaurant industry is heavily dependent on commercial LPG to maintain day-to-day operations. Once (supply) is interrupted, it will lead to the catastrophic large-scale closure of restaurants.” The Federation of Hotel and Restaurant Associations of India has also appealed to the government for assistance.
On the 9th, the Ministry of Petroleum and Natural Gas said it had instructed domestic refineries to increase LPG production. In response to the restaurant industry's urgent calls for help, the ministry said it had set up a working group to review gas supply requests from the restaurant and other sectors.