In a recent development, the prices of LPG (Liquefied Petroleum Gas) commercial cylinders have been increased across several major cities in India, including Delhi, Mumbai, and Chennai. The hike, which took effect on September 1, 2024, has sparked concern among businesses, particularly in the hospitality and food services sectors, which rely heavily on LPG for their operations. The price adjustment is expected to have a ripple effect on the cost of services and goods, adding to the financial burden of small and medium enterprises (SMEs).

In Delhi, the price of a 19 kg commercial LPG cylinder has risen significantly. Similar increases have been reported in Mumbai and Chennai, where businesses are already grappling with high operating costs. The price hike comes at a time when inflationary pressures are already impacting consumer spending and business profitability. The increase is likely to further strain the budgets of restaurants, hotels, and other businesses that depend on commercial LPG for cooking and other operations.

Industry experts have expressed concern over the timing of this price hike, arguing that it could slow down the recovery of businesses that were hard-hit by the COVID-19 pandemic. Many businesses have only recently begun to regain their footing, and the increased cost of LPG could undermine these efforts. Additionally, the hike is expected to lead to a rise in the prices of food and beverages in restaurants, as businesses pass on the increased costs to consumers.

The latest price hike is part of a broader trend of fluctuating LPG prices in India, which are influenced by global oil prices and domestic factors. The government has periodically adjusted LPG prices to reflect changes in international markets, but these adjustments often come as a shock to businesses that rely on stability in their operating costs. The unpredictability of LPG prices has made it difficult for businesses to plan their budgets effectively.

The impact of the price hike is expected to be felt most acutely by SMEs, which typically operate on thin margins and have less flexibility to absorb increased costs. These businesses may be forced to cut costs in other areas or increase prices for their customers, both of which could negatively impact their competitiveness. The hospitality sector, in particular, is likely to feel the pinch, as it is one of the largest consumers of commercial LPG.

While the government has not provided a detailed explanation for the latest price increase, it is widely understood to be a response to rising global energy prices. However, the decision has drawn criticism from various quarters, with some arguing that the government should have taken steps to mitigate the impact on small businesses. There have been calls for the government to introduce subsidies or other forms of relief to help businesses cope with the higher costs.

In conclusion, the recent hike in LPG commercial cylinder prices across major Indian cities is expected to have significant repercussions for businesses, particularly in the hospitality and food services sectors. The increase adds to the financial challenges faced by SMEs and could lead to higher costs for consumers. As businesses navigate these changes, there is growing pressure on the government to provide support and ensure that the price hikes do not derail the recovery of India’s economy.