BENGALURU: The West Asia war, and the consequent closure of Strait of Hormuz – a critical trade passage – has spelled an unfortunate omen for India’s fuel influx. This disruption has meant that critical fuel in most of its forms, including petrol, diesel, LPG, aviation fuel, and more, has been of short supply.
The LPG shortage in particular led domestic usage to be prioritised, leaving hotels and restaurants in Bengaluru and other districts of Karnataka – all of which require LPG for commercial use – in a soup.
It is the relatively smaller hotels that faced the brunt, according to PC Rao, president, Bangalore Hotels Association. “During the beginning of the conflict, which was the first week of March, small and medium hotels in Bengaluru (and Karnataka at large) did not get any LPG supply. Their stature meant that they could not make alternate arrangements as well. During those initial days, they were forced to shut down,” he said. Rao also mentioned that some hotels in the city tried to obtain LPG from private suppliers at exorbitant rates.
According to estimates provided by both Rao and Karnataka State Hotel Association member Subramanya Holla, about 40,000 – 45,000 cylinders of LPG are required each day by hotels in Karnataka. In the initial phases of the crisis, chief minister Siddaramaiah had stated that the daily demand from the state’s hotels was of 50,000 cylinders. Holla added that only 50% of the demand was being met by the state government.
“Karnataka’s hotels are receiving only half the number of cylinders required from the State Government. This is where the black market comes in with inflated, unaffordable prices,” he added.
A key aspect of this situation, according to Holla, is the fact that most of the state’s supply is restricted to Bengaluru, leading hotels in other districts to a state of disregard. “Hotels at the taluk level, beyond Bengaluru, are suffering the most,” he said, adding, “But many of them have opted for firewood. Wood is of ample supply in rural districts, and so is land. Usage of firewood kilns has been beneficial in terms of meeting the gap between LPG demand and supply.”
Since the crisis started, according to Rao, the state’s hotel industry has lost about Rs 1,000 crore. The amount is estimated to have been lost from a host of sources, including food and beverages, accommodation, hotel bookings (for marriages or other ceremonies), event bookings, and more.
“It is anyone’s guess as to when the situation will stabilise. The war’s effect has also caused tourism to take a hit, which was a great source of revenue for the state’s hotels,” Rao said.