TIRUCHY: With eateries having already raised prices by around 10% following the Rs 300 hike in price of LPG cylinder in March, the recent spike of nearly Rs 1,000 per commercial cylinder is expected to push food prices up by another 10%.
The escalation of LPG cylinder has been swift. A 19-kg commercial cylinder that costed about Rs 1,800 before war broke out in the Middle East, rose to 2,200 in March and has now climbed to around Rs 3,200, which has put a huge strain on the sector.
Caught between rising costs and price-sensitive customers, eateries are recalibrating rather than imposing steep hikes all at once. Many have opted to trim portion sizes, quietly drop fuel-intensive items such as fried dishes, and stagger price increases to avoid a sudden dip in footfall.
“Several hotels have already increased prices, and many have reduced menu items, especially fried foods. More establishments are likely to follow with price hikes in the coming days,” said S Sundaresan, Secretary of the Tiruchy District Hotel Owners Association.
“May and June are peak months due to holiday travel. Food prices could rise by 20% if the current trend continues. Switching to alternatives like firewood or electric cooking is not easy, as kitchens and staff are not equipped for it,” he said.
Tea stall owners, however, are treading cautiously. Rowuthar Shah, President of the Tiruchy Tea Shop Owners Association, said further price hikes could hurt already declining sales.
“Our business has already been affected. Existing price increases have reduced footfall, and any further hike may not be viable,” he said. He also pointed to supply challenges. “Many small tea shops still depend on cylinders from informal channels, where prices can go up to Rs 4,500/cylinder.
This will ultimately affect the common man. We plan to take up the issue with the district administration and the state government after the election results,” he added. Street vendors remain the most vulnerable. Abdul Basheer, Secretary of the Street Vendors Association, said their limited customer base leaves little room to absorb rising costs. “Margins are already thin. If costs go up, we have no option but to pass it on,” he said.
Consumer groups, however, have raised concerns over the extent of the price hikes. S. Pushpavanam, Secretary of the Consumer Protection Council, Tamil Nadu (Tiruchy), said while LPG price increases may be unavoidable as the government is rising the price to cut the demand, the burden on consumers should not be excessive.
“Restaurants can rationalise costs through operational adjustments. Passing on steep increases entirely to consumers is not justified,” he said.