Why the Iran–Israel War Could Impact Restaurants, Zomato-Swiggy Deliveries and Gig Workers’ Income

March 12, 2026, 3:12 pm

The rising geopolitical tensions in West Asia have now begun impacting India’s food service sector. The tensions in the region have impacted the energy shipping lanes in the region, including the Strait of Hormuz, through which a significant portion of India’s LPG imports pass. As a result of the slow movement of these ships, commercial LPG cylinder supply chains have now begun impacting restaurants and hotel operations. Similarly, food delivery platforms have also reported a sharp decline in orders. While the government says the energy supply situation in the country remains stable, industry reports say restaurant operations, food delivery orders, and the earning potential of food delivery partners may get impacted.

Why the Iran–Israel Conflict Matters for India’s LPG Supply

The ongoing conflict in West Asia has led to a high degree of concern regarding the shipping of energy resources. Among these shipping routes, the Strait of Hormuz plays an important role. A significant portion of oil and gas resources are transported through this route.

According to industry estimates, approximately 80-85 percent of India’s LPG imports are transported through this route. Hence, in the event of a conflict in the region, the transportation of these resources may get delayed.

India imports a significant portion of its LPG demand. Hence, in the event of a conflict in the region, the domestic supply of LPG may get affected.

Why Commercial LPG Supplies are Tightening

Restaurants, hotels, and catering services depend on commercial LPG cylinders for their day-to-day operations. However, supply delays have already been reported from a number of cities.

According to industry sources, the supply of shipments passing through the Strait of Hormuz has slowed down because of the changing geopolitical scenario. Hence, the arrival of LPG cargo shipments is slowing down.

These delays have caused a tightening of the availability of commercial LPG cylinders in the market. Restaurants that rely on timely deliveries may face severe operational challenges if this disruption persists.

A report by Motilal Oswal Financial Services has issued a warning that the tightening of commercial LPG supplies could cause short-term operational challenges for restaurants and food-related businesses in India.

India’s Strong Dependence on LPG Imports

India requires 28-30 million metric tonnes of LPG annually. About 10-12 million metric tonnes are supplied by refineries and gas processing plants within India itself.

However, 55-60 percent of India’s LPG demand is met by imported LPG. Hence, LPG is prone to disturbances in international shipping routes as well.

Therefore, if there is a disturbance in the shipping routes, it could put pressure on India’s LPG supplies.

Which Sectors Consume the Most LPG

Household cooking is the largest segment in the consumption of LPG in India. Industry estimates show that 85-90 percent of total LPG demand is met by household consumption.

Commercial consumption is also a part, but a smaller share. Restaurants, hotels, and catering services collectively account for 8-10 percent of total LPG demand.

Though a smaller share, the food services industry consumes 2-3 million tonnes of LPG every year. Daily deliveries are required for running a restaurant.

Why Restaurants Feel the Impact Quickly

The storage capacity of the LPG is generally low. Restaurants also receive LPG supply on a regular basis.

A small restaurant uses one to two cylinders of 19 kg LPG per day. A mid-sized restaurant uses three to five cylinders of LPG per day. A large hotel uses six to ten cylinders of LPG per day.

The LPG stock of most restaurants is generally for two to six days. Hence, the supply of LPG gets delayed within 48 to 72 hours.

Restaurants Turning to Firewood and Charcoal

The shortage has already led several restaurants to look for alternative solutions. According to sources, several restaurants in Chennai, Bengaluru, and Kolkata have resorted to using firewood and charcoal for cooking.

Some restaurants have resorted to traditional wood-fueled stoves for cooking. Others have removed some dishes from the menu to reduce gas consumption.

Some restaurants have also started operating with a reduced menu.

Firewood Prices Surge Amid Rising Demand

This sudden change in the source of fuel has caused the prices of firewood to increase manifold. Traders have confirmed that the prices of firewood have almost doubled.

The prices of firewood in Madurai have risen from Rs. 7,500 per tonne to Rs. 15,000 per tonne. This is because the hotels and restaurants have started buying the firewood in bulk.

This has caused the supply chain to be affected. Hence, the shortage of firewood has started.

Some hotels have started stocking up on firewood so that the supply of fuel is not interrupted.

Restaurants and Hotels Face Operational Pressure

Restaurants and hotel kitchens in several cities are already experiencing the impact. Many restaurants have reduced their menus, while some have taken up bulk cooking due to reduced LPG supplies.

Some restaurants have even suspended operations. It is estimated that about 20 percent of hotels and restaurants in Mumbai have already been impacted due to reduced LPG supplies.

If the supplies are not improved, several restaurants and hotels would find it difficult to function.

Possible Impact on Zomato and Swiggy Orders

Food delivery services may experience short-term disruptions as well. Restaurants may limit dishes on offer or reduce cooking hours or even shut down kitchens if LPG supply is not restored.

This may impact orders on food delivery platforms. The Motilal Oswal Financial Services report highlights that food delivery services had shown improvement in growth recently.

However, disruptions in LPG supplies during the remainder of March may impact order volumes on food delivery platforms such as Zomato and Swiggy.

Gig Workers Report a Sharp Drop in Orders

Delivery workers have already begun reporting a decline in their income. The Gig and Platform Service Workers Union reported a decline in food delivery orders.

Previously, workers were able to complete around 30 orders a day. Now, workers are only able to complete five to ten orders a day.

The union reported a decline of around 50-60 percent in orders in various areas. Cloud kitchens and restaurants facing difficulties in normal operations have led to a decline in orders.

As gig workers entirely rely on the orders, the decline in orders has impacted their income.

Union Seeks Urgent Government Intervention

The Gig and Platform Service Workers Union have written to the Union Labor Minister. It has requested that the government ensure an uninterrupted supply of commercial LPG to restaurants and food businesses.

The union has also requested that there be financial assistance worth Rs 10,000. In addition, there should be a moratorium on deactivation of IDs of delivery partners.

The union has requested that there be minimum incentives every day. It has also requested that all gig workers be covered under the Code on Social Security, 2020.

Government Says Energy Supplies Remain Secure

Despite the disruptions, the government says India’s overall energy supply remains stable. Officials state that India consumes about 55 lakh barrels of crude oil per day.

The country now imports oil from around 40 different countries. Nearly 70 per cent of crude imports arrive through routes outside the Strait of Hormuz.

Officials say diversified procurement has helped strengthen energy security.

Steps Taken to Increase LPG Availability

The government has also undertaken some measures to increase LPG supplies. Refineries and petrochemical plants have been instructed to maximise production of LPG.

These refineries are now using propane, butane, and other such feedstock to add to LPG supplies. These measures have helped increase domestic LPG supplies by 25 percent.

At present, the total domestic supplies are being used to meet demands from household consumers. For non-domestic supplies of LPG, priority is given to hospitals and educational institutions.

A three-member committee has been set up to ensure supplies to restaurants, hotels, and other such users. Members of this committee are from Indian Oil Corporation, Hindustan Petroleum Corporation Limited, and Bharat Petroleum Corporation Limited.

LPG Prices and Consumer Supply Situation

Officials say the price of a domestic LPG cylinder in Delhi currently stands at Rs 913 after a recent increase of Rs 60. Beneficiaries under the Pradhan Mantri Ujjwala Yojana pay Rs 613 per cylinder.

The government has also sanctioned Rs 30,000 crore compensation for oil marketing companies to pay LPG under-recoveries.

The authorities have observed that there is a panic booking and hoarding of cylinders in a particular area. However, the normal LPG delivery cycle is 2.5 days.

To avoid diversion, the system of delivery authentication codes is being expanded to 90 percent of consumers. Moreover, the minimum gap between LPG bookings has been raised from 21 days to 25 days on a temporary basis.

Officials say the government continues to monitor the global situation closely while taking measures to ensure uninterrupted fuel supply and protect households and priority sectors.

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