VIJAYAWADA: The steep and successive hikes in the price of commercial LPG cylinders have triggered widespread concern across Andhra Pradesh.
The price of a 19-kg commercial LPG cylinder has jumped from Rs 1,700 in January to nearly Rs 3,250 now, registering a sharp increase of Rs 1,550 within just four months. The latest hike of Rs 933 has dealt a severe blow to hotels, restaurants, bakeries and street food vendors who rely heavily on LPG for their daily operations, besides posing a threat to livelihood of workers.
The upward trend has been consistent over the past few months, steadily increasing the financial burden on small businesses. After January level, the price of LPG cylinders rose by Rs 49 in February, followed by a Rs 114 increase in March, taking to nearly Rs 1,900-2,000. In April, a further sharp hike of Rs 195 pushed the price to around Rs 2,200, before the unprecedented spike of Rs 933 in May.
The LPG price rise has significantly hit operational costs of hospitality sector. Commercial LPG is not subsidised, leaving small businessmen exposed to market price fluctuations. Many eateries, which operate on thin profit margins, say the sudden surge has disrupted their cost structures.
Rising costs may push eateries to hike prices
Several vendors are now left with limited options either to absorb losses, reduce quantity and quality, or pass on the burden to consumers by increasing the prices of food items.
RV Swamy, president of Andhra Pradesh Star Hotels Association, said, “Hoteliers are already incurring heavy losses due to increased input costs. To protect the livelihoods of thousands of workers and ensure the survival of the industry, we have no option but to increase the prices of food items by up to 10%.” He urged both the Centre and the State government to offer tax concessions or subsidies to enable the hospitality sector to withstand the crisis.
Echoing similar concerns, Vijayawada Hotels Association president PV Ramana said, “There are around 500 restaurants and small hotels in the city. All of them will now face severe pressure. Some may be forced to shut down, while others will have no option but to pass the burden onto consumers,” he said.
Ramana appealed to the government to supply piped natural gas (PNG) to hotels at an affordable price and expedite new connections as an alternative to LPG.
With eateries set to increase the prices of food items, the common man may cut back on eating out, leading to reduced footfall across restaurants and food stalls. This decline in demand could further strain businesses, creating a cycle of rising costs and falling revenues. Any prolonged downturn could result in job loss on a massive scale, particularly in the unorganised sector.