A deepening LPG (liquefied petroleum gas) crisis triggered by disruptions in global energy supplies due to the ongoing West Asia conflict is severely impacting India’s food and dairy supply chain, forcing eateries to shut or scale down operations while hitting milk demand and processing.
The government has prioritised domestic LPG supply, restricting availability for commercial users such as restaurants and food processors, leading to widespread shortages across cities. As a result, restaurants and hotels—key bulk buyers of milk and dairy products—have reduced operations, cut menus or temporarily closed, directly lowering demand for milk and dairy items.
The ripple effect has extended to the dairy sector, where disruptions in fuel supply are affecting milk processing, packaging and by-product manufacturing such as paneer, sweets and other value-added items. In several regions, dairies have been forced to cut procurement due to limited processing capacity, while shortages of packaging materials and rising costs are adding to operational stress.
The crisis has also led to reduced LPG allocations for commercial sectors—sometimes as low as 10% of normal supply, forcing businesses to shift to alternatives like electric appliances or firewood, though these are often inadequate for large-scale operations.
Industry bodies warn that prolonged disruption could impact millions of livelihoods and destabilise the broader food ecosystem, with dairy supply chains particularly vulnerable due to their dependence on continuous processing and cold chain logistics.
Source: Dairynews7x7 18th March, 2026 Read full story here
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