Goodbye Cheap Eats, Hello Gas Hikes

Gas-Driven Inflation Hits Indian Restaurant Menus As Supply Chains Tighten

By Katya Naidu

What?

For India’s restaurants limping back to normalcy after the initial days of the West Asia war-induced cooking gas crisis, the 50% hike in commercial LPG prices came as yet another blow. For over two months, most restaurants had been absorbing rising LPG costs due to supply issues, but the latest salvo on May 1 has made price hikes imminent. 

“I believe all the restaurants that are not fine-dining will have to pass on the costs, as a 50% price hike is very severe,” Anurag Katriar, founder of Indigo Hospitality, told The Core. “Everyone else, be it quick service restaurants (QSR), affordable and casual dining, has no option but to pass it on. It’s not just the price hike, but there is heavy uncertainty around the West Asia war, and we do not know whether it will improve or not. It’s prudent to pass on the costs.” 

His company operates a chain of restaurants, including Indigo Deli, Indigo Café, Neel, and Indigo Burger Project. 

The latest hike amounts to Rs 993 per cylinder, bringing the post-hike price per 19-kilo cylinder to Rs 3,071 in Delhi. This comes after a Rs 195 hike in April and Rs 114 in March. In the last three months, commercial LPG prices went up by around Rs 1,300 per cylinder.  

What Does This Mean? 

To survive, many establishments are pivoting toward infrastructure changes like induction cooking, biofuels, and piped natural gas (PNG) to reduce their heavy reliance on expensive cylinders.

“The supply crisis began after the government temporarily halted LPG cylinder supplies for commercial use, giving preference to households. That itself has pushed up landed costs of LPG by 40-45% in the last few months,” Amit Goyal, CEO & founder of Amar Pure Gold, told The Core. And, the latest LPG price hike has come on top of it. 

Goyal’s company manufactures frozen food as well as manages 55 outlets of Captain Sam’s Pizza. During the supply crisis, around 15-20% of Captain Sam’s Pizza outlets had shut down, and had just opened up. But the LPG crisis has hit them yet again. 

“LPG isn’t just another input cost; it’s central to day-to-day operations. A spike of this scale puts direct pressure on already tight margins,” said Goyal. 

What Next? 

Restaurants are also trying to change how they cook, with some thinking of a switch to PNG. Vishal Khalde, founder & CEO of Blue Planet Biofuels, which sets up and operates waste-to-gas plants, said that he has seen a surge in inquiries on the use of methane by restaurants as well. 

While restaurants until now have been seen as feedstock providers for him, they could also become customers as well. 

“Earlier, they would view waste with no importance. Now they see it as a partial replacement for gas.” 

The price hikes are also likely to impact customer experience and service consistency, which has already been going downhill in the last few months. 

Goyal has had greater success at reducing LPG dependence on his manufacturing side of the business. He has been using diesel burners, boilers and more.

While the alternatives are not exactly costlier, they require a rethinking of the infrastructure, which isn't built for them.

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Rs 37,500 crore

That is the total financial outlay the Union Cabinet has approved on Wednesday to promote coal gasification projects, aimed at boosting clean energy production and cutting import dependence on LNG, urea, ammonia and methanol.

Overview: The scheme targets gasifying 100 million tonnes of coal by 2030. Financial incentives of up to 20% of plant and machinery costs will be offered for new surface coal and lignite gasification projects.

Single project support is capped at Rs 5,000 crore, while a single entity group can receive up to Rs 12,000 crore across all projects, with selection through competitive bidding.

Setting: India holds one of the world's largest coal reserves at around 401 billion tonnes, with coal accounting for over 55% of the country’s energy mix, making gasification a strategic lever to convert these reserves into syngas for domestic fuel and chemical production.

Air India Cuts Routes

Air India on Wednesday said it will temporarily cut flights on several international routes between June and August, citing airspace restrictions and record-high jet fuel prices driven by the Iran war. The conflict has forced longer re-routings and sharply raised global fuel costs, compounding the airline's mounting operational losses.

Overview: The carrier will suspend its Delhi-Chicago and Mumbai-New York services, while reducing frequencies on Delhi routes to Paris, Milan and Rome. Its Delhi-Shanghai service has also been suspended. These disruptions come on top of Pakistan's existing airspace ban on Indian carriers, imposed last year amid bilateral military tensions.

Setup: With estimated losses already exceeding Rs 20,000 crore, Air India finds itself under far greater strain than rival IndiGo. Owner Tata Sons and strategic partner Singapore Airlines are now under increasing pressure to rein in costs and chart a credible path back to profitability for the beleaguered carrier.

Gold Imports Get Costlier

India has increased import duties on gold, silver and platinum to curb non-essential imports and protect foreign exchange reserves amid rising geopolitical tensions in West Asia. The government raised the effective import duty on gold and silver from 6% to 15%, while platinum imports will now attract a 12.5% duty, making precious metal imports significantly more expensive.

Context: Investors have pushed gold prices to record highs in recent months as fears of a wider regional conflict involving Iran and volatility in oil markets drive demand for safe-haven assets. In India, consumers have continued buying gold despite elevated prices, increasing pressure on the country’s import bill because India imports most of its precious metals.

Policymakers have previously used import duties to manage external pressures. The government raised gold duties after the 2013 balance-of-payments crisis to reduce dollar outflows, before lowering them in phases in recent years to discourage smuggling and support the jewellery industry.

Outcome: Industry executives warn the latest hike could push buyers toward illegal gold imports and hurt demand in the formal market.

Inflation Concerns Mount

India’s inflation outlook could worsen in the coming quarters as higher crude oil prices, rising logistics costs, rupee depreciation and weather-related risks begin to feed into consumer prices, according to Crisil.

By the Numbers: Crisil expects inflationary pressures to intensify in FY27, projecting CPI inflation to average 5.1%, driven by elevated crude oil prices, rising freight and insurance costs, rupee depreciation and the risk of a below-normal monsoon linked to likely El Niño conditions.

The agency said higher energy and food prices could gradually push up both headline and core inflation in the coming months, even as the RBI is expected to keep rates unchanged for now.

Context: India’s retail inflation rose marginally to 3.48% in April from 3.40% in March, according to Crisil, while food inflation increased to 4.2% from 3.9%. Higher prices in categories such as vegetable oils, ready-made food, fish, fruits and spices contributed to the uptick, even as fuel and transport inflation remained relatively contained due to stable petrol and diesel prices and favourable base effects.

Alzheimer’s Drug Debuts

Eli Lilly and Company has launched India’s first disease-modifying Alzheimer’s treatment, donanemab, under the brand name Lormalzi. Unlike older Alzheimer’s drugs that mainly manage symptoms, donanemab targets amyloid plaques in the brain and aims to slow cognitive decline in patients with early-stage disease.

How We Got Here: Alzheimer’s cases are rising rapidly in India as the population ages, but treatment options have remained limited. Doctors view monoclonal antibody therapies like donanemab as a major scientific breakthrough because they attempt to alter the progression of the disease itself. However, patients must undergo specialised diagnostic tests before starting treatment, and doctors must monitor them for side effects such as brain swelling and bleeding.

The Turning Point: The therapy’s high price could limit access. Reports suggest the monthly infusion could cost over Rs 90,000 per vial, placing it beyond the reach of most Indian patients without insurance coverage.

Markets Recover as Sellers Take A Break

On Episode 872 of The Core Report, financial journalist Govindraj Ethiraj talks to Arvind Chari, Chief Investment Strategist at Quantum Advisors as well as Ramesh Subramaniam, Global Director - Programmes and Strategy at the Coalition for Disaster Resilient Infrastructure (CDRI).

• Markets recover as sellers take a break

• India weathering global financial pressures better than headline data suggest, says S&P Global Ratings

• Rupee hits fresh all time low

• Govt launches Coal gasification projects which could help reduce energy imports

• Why are FPIs selling and the surprising data point on their investments

• Funding for resilient infrastructure is coming but the needs are higher