Despite relief, hotels unlikely to reduce food prices soon; owners want LPG at pre-war rates

Oil-marketing companies slashing the price of a commercial LPG cylinder by around ₹180 on Wednesday (July 1, 2026) is expected to bring some relief to the hotel and restaurant sector. However, this is unlikely to reflect on the food bill of restaurant-goers immediately.

Also read | Commercial LPG prices cut by ₹183 per refill

Restaurateurs The Hindu spoke to welcomed the move but said they wanted the price of commercial LPG cylinders to return to pre-war rates.

Karnataka State Hotels’ Association president G.K. Shetty said, “We received a ₹177 cut per 19.2 kilo commercial LPG cylinder in Bengaluru, when the industry was expecting a cut of ₹500 a cylinder. Our expectation is reasonable as the current price of crude oil per barrel has almost reached to the February 2026 level.’’

Mr. Shetty said he expects “another rollback after July 15” and wants to see the cylinder price “settle at ₹2,000 by end of this month”.

The reduction will “hardly make any difference” and there will be no change in the price of food items, said multiple restaurant owners in Mumbai.

“Having increased prices of about ₹1,300 a cylinder, a reduction of ₹183 hardly makes any difference. Large consumers may get some benefit but not the mid-level restaurant owners who constitute bulk of the crowd,” said a restaurant owner. “We had to incur a lot of losses in the beginning. Also, there is no certainty that prices will not go up again, because the West Asia conflict is far from over,” he said.

According to Jegan Damodarasamy, chief executive officer of the Sree Annapoorna Group in Coimbatore, the “prices increased 100%, and the reduction is just about 10%”.

“We need to wait and see. Though there is no issue in the availability of commercial cylinders for the past 20 days, the transport cost and price of packaging materials also shot up because of the war. Those prices should also reduce for the hotels to revise the food prices down,” he said.

Asked if hotels and restaurants will roll back menu prices once LPG cylinder prices come down to ₹2,000, he replied, “Once that happens, we have to see how quick and how much we can do something on the menu pricing. We can’t say anything now.”

Calling the price cut a “much-needed relief”, Piyush Kankaria, chairman of the National Restaurant Association of India — Kolkata chapter, said the city’s restaurants and cafes have been “battling high input costs for months”.

“With fuel accounting for up to 15% of kitchen expenses, this reduction eases immediate pressure on operating costs, helps keep menu prices stable, and gives operators breathing room to focus on quality and guest experience. For a price-sensitive market like Kolkata, predictable energy costs are essential if the hospitality sector is to plan and grow sustainably,” he said.

Welcoming the move, Sudesh Poddar, president of the Hotel Restaurant Association of Eastern India, said the government should bring down the LPG prices to pre-war level price.

(Inputs by M. Soundariya Preetha in Coimbatore, Senjuti Sengupta in Kolkata, Lalatendu Mishra in Mumbai, Mini Tejaswi in Bengaluru)