Jubilant FoodWorks says impact of LPG supply shortage limited amid West Asia war

Restaurant franchisee Jubilant FoodWorks today informed the exchanges that the war in West Asia and the consequent impact on liquified petroleum gas (LPG) cylinders has constrained supply to certain parts of its store networks.

Jubilant operates fast-food chains including Domino's Pizza and Dunkin Donuts.

The company further said that it is taking steps to conserve LPG and working overtime to move to alternate energy sources such as electricity and piped natural gas (PNG).

War impact: What did Jubilant FoodWorks state?

The release dated 28 March stated that “due to the ongoing geopolitical situation in the Middle East, there are supply constraints on the distribution of commercial LPG across the country. Consequently, the supply of LPG cylinders to certain parts of the company’s store network has been constrained.”

"Operational impact at this stage is limited and being actively managed. The company is taking several steps to conserve LPG and working overtime to move to alternate energy sources like electricity and piped natural gas (PNG)," it added.

Further, JFL added that it is in “constant engagement with oil marketing companies (OMCs) to remain apprised of the latest developments and plan operational responses accordingly, given the rapidly evolving nature of the situation”.

Jubilant also sought to reassure that the company “has resilient systems and processes in place to navigate short‑term operational challenges and will continue to closely monitor the situation”.

As war continues, LPG crisis sharpens

As the United States-Israel-Iran conflict drags on, concerns have increased over disruption of oil and gas supplies through the strategic Strait of Hormuz, that Tehran has blocked in retaliation. Further, Russia on Friday announced it has banned gasoline exports effective from 1 April to prioritise domestic supplies and stabilise fuel prices at home amid global market turbulence due to the ongoing conflict in Middle East, which is about to enter its fifth week.

Meanwhile, India is grappling with LPG shortage for the last few weeks due to the war. The Centre notified on Wednesday that supply “continues to be affected due to the prevailing geopolitical situation”, though no dry outs have been reported and cylinder deliveries are continuing as normal.

The government is also pushing households and commercial users to switch to PNG, which is considered to be a more convenient alternative that is both domestically produced and sourced through diversified supply.

In another major move, the central government on Friday also increased commercial LPG allocations to states by 20%, raising the quota to 70% of pre-war levels to meet industrial requirements, including steel and automobiles.

Disclaimer: The promoters of HT Media Ltd, which publishes Mint, and Jubilant Foodworks are closely related. There are, however, no promoter cross-holdings.