Food delivery platforms Zomato and Swiggy can see its quarterly revenue decline by about 3% if the ongoing LPG supply disruption lasts for a week, according to analyst estimates, as restaurants dependent on commercial cooking gas face operational constraints.
Food delivery growth has been supported by rising order volumes and higher restaurant participation in recent quarters. Any prolonged disruption in restaurant operations would slow that momentum add analysts.
Early signs of supply disruption are already visible in order trends. Gig workers association told NDTV Profit that delivery partners have seen a 10-15% drop in orders over the past two days due to shortage of LPG in restaurants leading to cuts in taking orders and reduction of menus.
How Many Restaurants Dependent on LPG?
Restaurants generally get their fuel supply from commercial LPG cylinders and pipeline gas. Industry estimates indicate that around 85% of independent restaurants operating on food delivery platforms like Swiggy and Zomato rely heavily on LPG cylinders.
In contrast, about 15% of restaurants fall under the quick-service restaurant (QSR) category, which typically have more diversified kitchen infrastructure. Many larger chains have pipeline gas, making them relatively less dependent on LPG.
Government Steps to Ease Supply
The government has moved to address the shortage by allowing oil marketing companies (OMCs) to allocate 20% of their average monthly commercial LPG supply for industrial and commercial users, which would go to restaurants, cafes and hotels. But this will depend on state discretion.
The allocation is aimed at ensuring that the hospitality sector continues to receive adequate LPG supplies and preventing deeper disruptions in food services.
However, restaurant associations say distribution challenges persist, as it could also lead to hoarding and black marketing. Food delivery companies are closely monitoring the situation as restaurant supply remains central to their operations.
This is an evolving situation which will depend on how long the conflict last and steps the government takes in the coming time.
ALSO READ: Bombay High Court Seeks Centre's Response On Domestic LPG Supply Concerns
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