Crude sails past $100: Eternal, Jubilant Foodworks, other restaurant-related stocks fall up to 7% on gas shortage fears

Crude sails past $100: Eternal, Jubilant Foodworks, other restaurant-related stocks fall up to 7% on gas shortage fears

• Restaurant stocks fell up to 7% amid gas shortage fears
• Brent crude surged past $100 a barrel, fueling inflation concerns
• Restaurants face LPG shortages, risking closures and job losses

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Shares of restaurant-related stocks like Eternal, Swiggy, Jubilant Foodworks, others fell up to 7% on March 12 amid gas shortage fears as Brent crude sailed past $100 a barrel.

Oil prices leapt 9% to above $100 a barrel on reports of more ships hit in Gulf waters and the closure of oil terminals - a jump that promises to fuel inflation and push borrowing costs higher worldwide.

Investors took little comfort from the International Energy Agency's plan to release 400 million barrels of oil from its reserves, the largest such move in its history. As part of that, the U.S. said it would release 172 million barrels of oil from next week.

Both oil benchmarks were up 9%, with Brent crude futures at $100.22 a barrel, extending a rise of more than 4% overnight. U.S. crude futures were at $95.41 a barrel.

Shares of food delivery company Eternal were the biggest loser on benchmark Nifty 50 index by falling over 3%. Shares of its peer Swiggy were trading 2% lower at 10:05 am on March 12.

Shares of Jubilant Foodworks and Sapphire Foods were trading 3.5% and 1.5% lower, respectively.

Stock of United Foodbrands, the parent of Barbeque Nation, were trading 7% lower at Rs 207 apiece.

"If the commercial LPG shortage due to Middle East war persists through the remainder of March, it will result in temporary decline in order volumes for Swiggy and Eternal," said Motilal Oswal.

"The Mideast conflict could place banks at a risk of higher credit costs, while non-bank lenders may face drag on net interest margins, credit cost and growth," said analysts led by Prakhar Sharma of Jefferies.

From induction cooktops and microwaves to firewood and solar options, restaurants, street food vendors and catering businesses across the country are scrambling for alternatives as a shortage of commercial LPG cylinders begins to disrupt kitchens amid the widening conflict in West Asia.

With the government prioritising domestic cooking gas supply to households as the war disrupts global fuel lifelines, businesses dependent on commercial LPG -- from small eateries to high-end restaurants -- are watching the situation anxiously, with some even staring at possible closure in the days to come.

In national capital Delhi, irregular LPG supply has gripped kitchens across the city and many restaurants are left with stock for a day or two, fearing temporary closure and concerns over staff wages. Industry representatives say many eateries in the capital are trying to manage the situation through adjustments, reported PTI.

AAP chief Arvind Kejriwal slammed the Narendra Modi government for the "heavy LPG shortage" affecting people across the country and questioned the prime minister's "support" for Israel and the US.

"There is a chance that almost 1 crore people would be unemployed because of the power shortage situation emerging," he said.