LPG shocker: Small hotels, tea shops and push carts in Tamil Nadu reel from Rs 993 single-day hike

CHENNAI/NEW DELHI: Stateowned oil companies have announced a steep increase in the price of 19-kg commercial LPG cylinders by Rs 993 per refill to a record high of Rs 3,071.50. Chennai rate stands around Rs 3,237.

The rates for 5-kg FTL, or market-priced LPG cylinders, have been hiked from Rs 549 to Rs 810.50 per bottle (it now costs a shade lower than a 14.2-kg domestic LPG cylinder, priced at Rs 913). The revision, effective May 1, is among the steepest hikes recorded for commercial LPG. The prices of aviation turbine fuel (ATF) rates for international airlines have been increased by $76.55 per kilolitre to $1,511.86, while ATF prices for domestic airlines have been left unchanged.

The nearly 42% hike has left the hotel industry anxious, with many outlets already witnessing closures, trimmed menus and fuel shortage.

“They are pushing us to shut down our business,” said Arul Murugan, secretary of the Namakkal Hotel Association. “Due to a shortage, cylinders were already being sold in the black market for around Rs 3,500 and above, and agencies are treating us with a ‘take it or leave it attitude’,” he added.

In Namakkal, said Murugan, the impact is already visible among smaller units. “Mid-sized hotels are still running, but small hotels have closed down. Units with two or three workers cannot operate like before,” he said.

Commercial LPG constitutes less than 1% of the total fuel consumption, but the impact is significant for eateries and small businesses that entirely depend on it.

In Chennai, many tea shops have stopped using boilers. “Now, tea is boiled in bulk, around 10 litres at once and stored in drums and served directly from there,” said Ratheesh, a tea shop owner in Kilpauk.

While several push carts, family-run eateries already shut operations, for many small and chain restaurants that were running on trimmed menus the latest steep hike has come as a jolt.

“Cylinders will eat up a large portion of our spending, equal to labour cost. This is unacceptable,” said a hotel manager in Nungambakkam.

“At this cost, we cannot sell idly at Rs 10. But if we raise menu prices, we may lose customers. Either way we lose,” said a manager at Shivas eateries in Aynavaram.