Your next biryani bowl, burger or that cheesy treat may soon cost a little extra. With fuel prices rising, India’s restaurants and delivery apps are bracing to make food 5-10% pricier from next week, as an industry already battling LPG shortages, soaring gas costs and staff crunches adds yet another expense to the menu.With LPG supply concerns already having pressurised the food industry, restaurants and delivery platforms are now preparing for another blow. After Friday’s fuel price hike, food prices are expected to rise by 5-10% from next week as businesses struggle with growing costs. Industry executives cited by ET said that the rise in petrol and diesel prices by state-run oil companies is likely to push up menu prices, delivery charges and overall food costs. For many restaurant chains, the increase now appears unavoidable.Vikrant Batra, founder of Cafe Delhi Heights, which operates 50 outlets in 17 cities said “Fuel price hikes will lead to an increase in our transportation, packaging, material and input costs; we are not left with any choice but to increase prices.”“The cascading effect is such that the cost of living for our staff members will also go up.” These price hikes come as the Middle East conflict stretches beyond 75 days, sending global crude prices from around $70 to over $100 a barrel. Since the US and Israel launched joint strikes on Iran, Tehran has tightened its grip over the crucial Strait of Hormuz, a key global oil route, choking energy supplies, disrupting markets and pushing fuel prices sharply higher worldwide.
Restaurants rethink annual price plans
While some brands are expected to begin revising prices within days, others are planning phased increases through June and July.The timing has disrupted the usual pricing cycle for many operators. National Restaurants Association of India (NRAI) president Sagar Daryani said restaurant businesses, which often revise prices annually around September, are now being forced to act much earlier.“Usually, we take an annual price hike around September. This year, we have no choice but to increase prices from July 1,” said Daryani, who is also cofounder of Wow! Momo.The latest fuel revision is the first major increase in nearly four years, taking petrol prices in Delhi to Rs 97.77 per litre and diesel to Rs 90.67. Industry executives said the impact stretches far beyond fuel tanks, affecting transportation, supply chains, packaging materials and food inputs.Restaurants, many of which are already dealing with nearly 60% higher LPG costs, say there is little room left to absorb further shocks internally.“I don’t think the market has the capacity to take anymore shocks,” said Saurabh Khanijo, managing director of Kylin chain of restaurants. “We will have to see how much of an impact we can take; our raw material costs will go up.”
Delivery costs, discounts and dining-out all under pressure
For food delivery platforms, rising logistics costs are expected to reshape customer spending patterns as well. According to a senior executive at a leading delivery company, consumers may soon face higher delivery fees, lower discounts and reduced minimum order thresholds.At the same time, Prime Minister Narendra Modi’s work-from-home appeal is creating a split impact across the sector. While more households staying indoors could support delivery demand, restaurant operators said dining-out, especially office lunches and Friday group outings, is likely to suffer.“The sentiments have been low after the PM’s announcement on working-from-home,” Khanijo said.Industry leaders also flagged concerns over possible increases in commission or channel partner fees from delivery platforms such as Zomato and Swiggy, warning that such a move would further complicate efforts to balance margins without sharply raising consumer prices.
Can restaurants absorb the heat?
Despite the pressure, many operators remain cautious about aggressive hikes, aware that consumers are already battling inflation across essential categories.“While some gradual price corrections across dining-out and ordering in May become inevitable if the situation persists, I believe several responsible restaurant brands will first try to absorb a large part of the impact through operational efficiencies, tighter cost controls and alternative energy solutions rather than immediately passing it on to guests,” Zorawar Kalra, managing director of Massive Restaurants told ET.“That being said, some consumers can expect certain price increases especially in smaller players and those with thin margins.”Restaurant owners say survival now depends on careful pricing strategy rather than abrupt changes.“We can’t do this overnight. We will have to do the menu engineering in such a manner that it helps us survive competition and in a way that it doesn’t pinch the consumers too much,” Batra said.
The scale of crisis
Data from an internal NRAI survey highlighted the depth of the crisis. Of its more than 500,000 members, 10% of restaurants temporarily shut last month, while 60-70% shifted to induction or alternate fuels, shortened menus or reduced operating hours as LPG shortages pushed many towards black-market purchases at inflated prices.Using 2024 as a baseline, the association estimates the sector could face losses of Rs 2,650 crore per day and Rs 79,000 crore per month this year.“Inconsistent service (menu cuts, delays, reduced hours) has led to lower visit frequency and discretionary spending and reduced repeat dining,” the survey said.The pressure is not limited to eateries alone. Costs of raw materials are already climbing, with milk prices moving higher after Amul and Mother Dairy raised rates by Rs 2 per litre this week.Executives warned that rising transportation costs are also likely to increase prices of vegetables, fruits and staple goods, pushing inflation deeper into household budgets.As fuel, logistics and raw material costs continue to rise, the impact is set to travel from restaurant menus and delivery apps straight to kitchen tables across the country.
