LPG Shortage Disrupts Hospitality, HRAWI Seeks License Fee Extension

Hotel And Restaurant Association (Western India) (HRAWI) has approached the Maharashtra Government seeking relief measures amid ongoing disruptions in commercial LPG supply, which have affected hospitality operations across the state and other parts of India.

The industry body has submitted a representation to Sunetra Ajit Pawar, Hon’ble Deputy Chief Minister and Minister for State Excise, requesting a one-month extension for the Annual License Fee payment deadline from 31st March to 30th April. As an alternative, HRAWI has proposed a staggered payment structure, allowing businesses to pay the annual fee in four quarterly instalments due on 31st March, 30th June, 30th September and 31st December.

The request comes at a time when LPG supply disruptions have significantly impacted operations. According to industry estimates, around 30 to 35 percent of hotels and restaurants are currently shut due to limited or no supply from distributors. Operating establishments are functioning with reduced service hours and limited menus in an effort to manage fuel usage. The situation is expected to worsen, with several outlets at risk of closure within the next 2 to 3 days if supply conditions do not improve.

Pradeep Shetty said, “The situation on the ground remains critical, with approximately 30 to 35 per cent of hotels and restaurants currently shut, owing to a near complete halt in LPG supply from distributors. Establishments that continue to operate are doing so under curtailed hours and restricted menus, optimising fuel usage to sustain operations. However, many of these establishments may also be forced to shut within the next 2 to 3 days if supplies are not restored. At this critical juncture, we urge the Government to provide immediate relief by granting an extension or permitting staggered payment of the Annual License Fee. Such support will go a long way in helping the industry navigate this liquidity crunch.”

The supply disruption has resulted in business losses estimated at 25 to 30 percent across India. Operators are reporting reduced service capacity, cancellations or postponements of events, lower occupancy levels in hotels, and higher operating costs as they explore alternatives to maintain operations.

Reinforcing the industry’s request, Chetan Mehta stated, “We request the Government a one month extension of the license fee payment deadline from 31st March to 30th April. In case an extension is not feasible, we seek approval for an alternative, a staggered payment mechanism allowing the annual license fee to be paid in four quarterly instalments.”

The impact is particularly visible in large-format catering operations and high-volume food production units, where dependence on LPG is high. The disruption is also affecting employment levels and creating downstream challenges for supply chains dealing with perishable goods and related services.

Pradeep Shetty added, “With no LPG supply from distributors and operations severely curtailed, cash flows have been significantly disrupted, making it extremely difficult for businesses to meet statutory financial obligations such as the annual license fee without impacting salaries, vendor payments and essential operations. The deferment of payment towards the annual licence fee will go a long way in helping the industry navigate this liquidity crunch. At the same time, we request urgent intervention to restore commercial LPG supply, as the sector will continue to remain under strain until normalcy is achieved.”