THIRUVANANTHAPURAM: The steep rise in commercial LPG prices has jolted Kerala’s restaurant industry, with eateries warning of a 50-60% hike in menu prices. On Friday, the central government increased the price of 19kg commercial LPG cylinders by Rs 993, with the cost of a cylinder crossing Rs 3,000 in the state.
The decision has come as a further blow to food-business operators who are already on the verge of closure due to the LPG crisis triggered by tensions in West Asia.
Warning of job losses and a spike in food prices, the Kerala Hotel and Restaurants Association (KHRA) has called for a statewide shutdown on May 6, while demanding immediate relief measures from the Centre and state governments.
KHRA state president G Jayapal said the sector is already under severe stress and will not be able to absorb the latest LPG price hike.
He said that the situation is grave and the cumulative rise in cost of LPG, milk, vegetables, pulses, and cooking oil has made operations unsustainable. “Prices of essentials have skyrocketed. Coconut oil that once cost Rs 100 is now nearing Rs 300. Pulses are around Rs 150 per kg, chickpeas have crossed Rs 100, and even small lentils are touching Rs 170. Along with this, LPG prices have shot up drastically. To stay viable, we may have to raise menu prices by 50-60%,” he said.
At the same time, operators fear reduced footfall and decline in sales if the menu rates are hiked. “A steep hike is not practical. Even increasing the price of a cup of tea from Rs 12-14 to Rs 18-20 overnight is not feasible. A Rs 2 increase itself is difficult to sustain customers,” said Sasidharan, a restaurant owner in the state capital.
KHRA said the burden of LPG price hikes is disproportionately borne by commercial cylinder users. “Around 85% of LPG usage is domestic and only 15% is commercial. Yet, instead of increasing domestic prices, the entire burden is shifted to the commercial segment. This results in higher GST collections for the government while oil companies also maintain profits,” Jayapal alleged.
The association has urged both the Centre and the state government to intervene and offer relief measures such as subsidies, waiver or extension of loan repayment deadlines, reduction or deferment of licence fees, and relaxation of various taxes.
The Kerala Vyapari Vyavasayi Ekopana Samithi and political parties have announced solidarity with KHRA’s statewide strike on Wednesday.
The CPM state secretariat called for widespread protests against the steep hike in commercial LPG prices, alleging that the move would trigger inflation and ultimately burden the public. In a statement, the party accused the Union government of prioritising corporate interests and imposing an unprecedented increase in cylinder prices.
The hike in LPG prices right after the latest series of assembly elections also raises questions about the legitimacy of the central government’s claims denying any shortage in the country. “Many of our businesses are now spending close to Rs 1 lakh a month on LPG alone, said K T Rahim, Ernakulam secretary of the KHRA. “Moreover, there is a limit to how much we can recover this amount by increasing the price of food items,” he said.
— With inputs from Kochi bureau