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

Oil companies, which will cut the price of a commercial LPG cylinder by around ₹ 180 on Wednesday (July 1, 2026), are expected to bring some relief to the hotel and restaurant sector. However, it is unlikely to be immediately reflected on the menu of restaurant visitors.

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

Restaurateurs The Hindus 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 GK Shetty said, “We have received a reduction of ₹ 177 per 19.2 kg commercial LPG cylinder in Bengaluru when the industry was expecting a reduction of ₹ 500 per cylinder. Our expectation is reasonable as the current oil price per barrel has almost reached the February 2026 level.”

Mr Shetty said he expected “another bounce back after July 15” and wanted the price of the cylinder “to settle at ₹2,000 by the end of this month”.

M. Ravi, president of the Chennai Hotels Association, described the reduction as “a small relief, like a summer rain”. The government should restore the prices to earlier levels as the cost of key ingredients like rice and dal have gone up significantly.

Sathish D. Nagasamy, managing director of Dindigul Thalappakatti, said LPG prices have not returned to normal levels. “The prices of chicken meat and other raw materials have also increased. Only when these costs come down will the reduction really benefit the hotel industry. The prices of all products are linked to the cost of LPG,” he said.

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

“With prices higher by ₹ 1,300 per cylinder, the ₹ 183 cut hardly makes any difference. Big consumers may get some benefit, but not mid-level restaurant owners who form the bulk of the crowd,” said a restaurant owner. “We had to suffer a lot of losses in the beginning. It is also not certain that the prices will not rise again because the conflict in West Asia is far from over,” he said.

According to Jegan Damodarasamy, CEO of Sree Annapoorna Group in Coimbatore, “Prices have gone up by 100% and the reduction is only 10%.

“We have to wait and see. Although there is no problem with the availability of commercial pressure cylinders in the last 20 days, the cost of transport and packaging materials have also increased due to the war. These prices should also come down so that hotels revise their food prices down,” he said.

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

Calling the price cut a “much-needed relief”, Piyush Kankaria, president of the National Restaurant Association of India in Kolkata, said the city’s restaurants and cafes had been “struggling with high input costs for months now”.

“With fuel accounting for up to 15% of kitchen spend, this reduction alleviates immediate pressure on operating costs, helps keep menu prices stable and gives operators 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.

Sudesh Poddar, president of the Eastern India Hotel Restaurant Association, welcomed the move and said the government should reduce LPG prices to pre-war levels.

(Contributions by M. Soundariya Preetha in Coimbatore, Senjuti Sengupta in Kolkata, Lalatendu Mishra in Mumbai, Mini Tejaswi in Bengaluru and Sangeetha Kandavel in Chennai.)

Published – 1 July 2026 11:00 PM IST