Why Iran–Israel war could hurt restaurants, Zomato-Swiggy deliveries and gig workers’ income? Explained

Rising tensions in West Asia and disruptions in key energy shipping routes are beginning to affect India’s food service ecosystem, including restaurants, food delivery platforms and gig workers.

Industry reports and restaurant associations say shortages of commercial LPG cylinders have started affecting kitchen operations in several cities. If the supply disruptions continue, the situation could temporarily impact restaurant activity, food delivery volumes and the earnings of delivery partners.

A report by Motilal Oswal Financial Services said the tightening supply of commercial LPG could create short-term operational challenges for restaurants and food service businesses in India.

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At the same time, the government has said the country’s overall energy supplies remain secure, and measures are being taken to ensure the uninterrupted availability of fuel.

Below is a detailed explainer on how the situation is unfolding.

Why the Iran–Israel conflict matters for India’s LPG supply

The conflict in West Asia has raised concerns over shipping routes used for transporting energy commodities, including LPG.

One of the most critical routes is the Strait of Hormuz, through which a large portion of global oil and gas shipments pass.

Industry estimates suggest nearly 80–85 per cent of India’s LPG imports move through this route. Any disruption in shipping through the region can slow down cargo movement and tighten supplies.

Since India imports a large portion of its LPG requirements, disruptions in the region can quickly affect domestic availability.

Why commercial LPG supplies are tightening

Commercial LPG cylinders used by restaurants, hotels and catering businesses have started facing supply delays in several cities.

According to industry sources, shipments passing through the Strait of Hormuz have slowed due to the evolving geopolitical situation.

This has led to delays in LPG cargo arrivals and distribution, tightening the availability of commercial cylinders in the market.

If the disruption continues for an extended period, restaurants that depend on regular cylinder deliveries could face operational challenges.

How dependent is India on LPG imports

India consumes about 28–30 million metric tonnes of LPG every year.

Around 55–60 per cent of the country’s demand is met through imports, while domestic refineries and gas processing plants supply about 10–12 million tonnes annually.

Because more than half of the demand is met through imports, LPG supplies remain sensitive to disruptions in international shipping routes and geopolitical developments.

Which sectors use the most LPG

Household cooking accounts for the largest share of LPG consumption in India.

Industry estimates suggest that about 85–90 per cent of total LPG demand comes from residential use.

Commercial consumption — including restaurants, hotels and catering services — accounts for roughly 8–10 per cent of total demand. This translates to around 2–3 million tonnes of LPG used by the food service ecosystem every year.

Although the share is smaller compared with household demand, restaurants depend on an uninterrupted daily supply to run kitchen operations.

Why can restaurants be affected quickly?

Restaurants usually maintain limited LPG inventory due to storage constraints and frequent delivery cycles.

A small restaurant typically consumes one to two commercial cylinders of 19 kilograms per day. Mid-sized outlets may require three to five cylinders daily, while large hotel kitchens can use six to ten cylinders each day. Most restaurants maintain inventory for only two to six days.

Because of this limited storage capacity, any delay in cylinder deliveries can start affecting kitchen operations within 48 to 72 hours.

Restaurants turning to firewood and charcoal

The shortage of LPG cylinders has already started affecting restaurant operations in some cities.

Industry sources said restaurants in cities such as Chennai, Bengaluru and Kolkata have begun using firewood and charcoal for cooking as LPG supplies remain tight.

Several kitchens have shifted to traditional wood-fired stoves to keep operations running.

Some restaurants have also removed slow-cooked dishes from their menus to reduce gas consumption, while others are operating with limited menu options.

Firewood prices surge amid demand

The sudden shift to alternative fuels has also pushed up firewood prices. Traders said the price of firewood has nearly doubled in several regions as restaurants and hotels rushed to secure supplies.

In Madurai, prices have reportedly risen from around Rs 7,500 per tonne to nearly Rs 15,000 per tonne. Suppliers said the surge in demand has created shortages in the firewood market, while supplies from rural areas have also declined.

Some hotels have started stocking firewood in advance to avoid disruptions in kitchen operations.

Restaurants and hotels are facing operational pressure

Industry participants say the shortage of commercial LPG cylinders has affected restaurants and hotel kitchens in several cities. Many restaurants have reduced menu options, while others have started bulk cooking to manage limited gas supplies.

In some cases, food operations have been temporarily suspended. Industry estimates suggest around 20 per cent of hotels and restaurants in Mumbai have been affected by LPG supply constraints.

If supplies do not improve soon, some establishments may face difficulties continuing normal operations.

Possible impact on Zomato and Swiggy orders

Food delivery platforms such as Zomato and Swiggy could also see a temporary impact if restaurant operations remain disrupted. The report by Motilal Oswal Financial Services said food delivery growth had been improving in recent quarters.

However, if LPG shortages continue through the remainder of March, restaurants may reduce menu options, shorten cooking hours or temporarily shut kitchens.

This could reduce the number of orders available on food delivery platforms and lead to a temporary moderation in order volumes.

Gig workers are reporting a sharp fall in orders

The situation has also raised concerns among gig workers who depend on food delivery income. The Gig and Platform Service Workers Union said the LPG shortage has sharply reduced food delivery orders in some areas.

According to the union, delivery workers who earlier completed around 30 orders per day are now managing only five to ten deliveries. The union said food delivery orders have reportedly fallen by around 50–60 per cent in certain areas as many restaurants and cloud kitchens struggle to operate normally.

Gig workers, who do not receive fixed salaries, are among the most affected by the decline in orders.

Union seeks government intervention

The Gig and Platform Service Workers Union has written to the Union Labour Minister seeking urgent intervention. The union has asked the government to ensure an uninterrupted supply of commercial LPG cylinders to restaurants and food businesses so that normal operations can resume.

It has also demanded that food delivery platforms provide immediate financial relief of Rs 10,000 to affected delivery workers. Other demands include a three-month moratorium on delivery partner ID deactivations and minimum daily incentives during the crisis.

The union has also called for full coverage of gig workers under the Code on Social Security, 2020.

What the government has said about energy supplies

The government has said India’s overall energy supplies remain secure despite the evolving situation in West Asia. Officials said India consumes about 55 lakh barrels of crude oil per day and has secured supplies through diversified procurement.

India currently imports crude oil from around 40 countries, and about 70 per cent of imports now come from routes outside the Strait of Hormuz.

Steps taken to manage LPG availability

To increase LPG availability, the government has directed refineries and petrochemical complexes to maximise LPG production by diverting propane, butane and other streams to the LPG pool.

Officials said these steps have increased domestic LPG production by around 25 per cent. The entire domestic output is currently being directed towards household consumers.

For non-domestic LPG, priority is being given to essential sectors such as hospitals and educational institutions. A three-member committee comprising executives from Indian Oil Corporation, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited has been formed to review allocations to restaurants, hotels and other commercial users.

What about LPG prices and consumer supply?

Officials said the price of a domestic LPG cylinder in Delhi is currently Rs 913 after a recent increase of Rs 60. Beneficiaries of the Pradhan Mantri Ujjwala Yojana pay Rs 613 per cylinder.

The government has approved Rs 30,000 crore compensation to oil marketing companies for LPG under-recoveries. Officials said there have been reports of panic booking and hoarding of cylinders. However, the normal LPG delivery cycle remains around 2.5 days.

To prevent diversion, the Delivery Authentication Code system is being expanded to around 90 per cent of consumers. The minimum gap between LPG bookings has also been increased from 21 days to 25 days as a temporary demand management measure.

Officials said the government is closely monitoring the global situation and taking steps to ensure uninterrupted fuel supplies while protecting households and priority sectors.