Tamil Nadu Trade Bodies Demand Cut in Commercial LPG Prices as Crude Oil Falls Globally

Crude oil, the raw material used to make cooking gas, has become noticeably cheaper on world markets in recent weeks. Yet businesses in Tamil Nadu that rely on commercial cooking gas cylinders say they are still paying sharply higher prices than before, and they want the government and oil companies to bring rates down to match the fall in crude.

A 19 kilogram commercial gas cylinder, the kind used by hotels, bakeries, tea stalls and wedding caterers rather than households, cost about ₹1,899.50 at the start of February. By June 1, the price of the same cylinder had jumped to ₹3,283, even as international crude benchmarks eased to levels last seen before the war-driven price surge.

The Tamil Nadu Hotels Association says this gap between falling crude prices and rising cylinder costs is squeezing hotel margins badly. Its president explained that food prices could only be raised by about 10 percent, since charging customers much more would drive them away. Some hotels have turned to firewood instead of gas to cut costs, but this has made working conditions less attractive for long-serving kitchen staff, leading many to quit. The association estimates that roughly one in ten small hotels and eateries in the state has shut down altogether, while those still running are weighed down by loans.

Bakers in the state face a similar squeeze. The Tamil Nadu Bakers Federation points out that bakeries use a mix of electric ovens, gas, diesel and occasionally firewood to make bread, cakes and pastries. With the cost of raw materials like flour and sugar already high, the federation says a reduction in both LPG and diesel prices would help bakery owners stay in business.

Tea shop owners are in a tighter spot because their product is consumed largely by ordinary, price-sensitive customers. The Chennai Metropolitan Tea Shop Owners Association has formally petitioned IndianOil, one of the country's main fuel suppliers, asking for relief, but says it has not yet received any response. For now, members are managing only by modestly raising tea and coffee prices and trying to maintain quality despite tighter budgets.

Wedding hall owners describe some of the most extreme hardship. According to the Tamil Nadu Marriage Hall Owners Association, there have been instances where members paid as much as ₹10,000 for a single cylinder because auspicious wedding dates, known as muhurthams, cannot simply be postponed when gas runs short. Some caterers suggested using cheaper domestic cylinders meant for households, but the association refused, since doing so would count as illegal diversion of subsidised domestic gas for commercial use. The association says even a ₹1,000 reduction per cylinder would offer meaningful relief after a difficult few months.

All four groups are essentially making the same point: when crude oil becomes cheaper internationally, the benefit should be passed on to commercial gas users just as quickly as price hikes were passed on earlier. They argue that fuel costs are now eating directly into business survival, not just profits, and are pressing both the central government and oil marketing companies to act.

As of the report, there has been no official response from the government or IndianOil announcing a price cut, leaving these small business owners to continue absorbing high fuel costs while hoping for a policy change.