Restaurateurs in Southern California Forced to Consider Price Hikes or Temporary Closures Due to High Gas Bills

Some owners forced to raise prices and consider temporarily closing due to spike in gas costs

Restaurants in Southern California are feeling the pinch of skyrocketing natural gas prices. With the wholesale cost of natural gas hitting record highs, many businesses that require gas cooking methods are now costing restaurateurs thousands of dollars more than their typical expenses, causing some owners to consider closing temporarily or raising prices to offset the charges.

One such restaurant is Pho 87, a Vietnamese restaurant in Chinatown. The key to their signature soup is 16 to 20 hours of simmering on the stove, but this proved catastrophic when owner Tre Dinh received his gas bill for January: over $8,000, as reported by the LA Times.  In December, the restaurant’s gas bill was roughly $800 for November usage. The bill he received in January leaped to around $2,000, but even knowing another price increase was coming didn’t prepare the restaurant owner for the bill he received in February.

Dinh is not alone; countless restaurateurs have been hit with sky-high January gas bills. The ripple effect is being felt through homes and businesses throughout Southern California Gas Co.’s 21.8 million customers. Pacific Gas & Electric is also estimating high gas bills for Central and Northern California this winter.

Businesses that require gas cooking methods – such as tabletop Korean barbecues, wok stations, and gas-powered stoves and ovens – are now costing restaurateurs thousands of dollars more than their typical expenses. Some owners are considering closing temporarily or raising prices to offset the charges.

Adding to existing concerns over inflation, supply-chain difficulties and labor costs, some feel helpless. 

Dinh is planning to take action by writing a petition while calling for aid for businesses struggling with their gas bills. In a bid to help other restaurants in Chinatown that may be struggling with high overhead costs like his own business due to these surging energy prices Dinh has changed his years-long practice of eating at his own establishment multiple times a day and patronizing other spots in the neighborhood two or three times a week; recently he’s begun eating one meal at Pho 87 and one meal at a nearby restaurant each day.

SoCalGas has stated that they do not profit from rising natural gas costs; however, this does little solace for struggling business owners like Dinh.

Fortunately for Dinh, February’s prices are set to decrease according to Southern California Gas Co., meaning that next month’s bill should be more manageable. Even so, Dinh knows he has no choice but to raise prices if he wants Pho 87 to stay open. Traditionally his family raises prices by 25 cents each year; given Pho 87’s latest gas bill though, he concedes he’ll have to raise them $1-$1.50 for entrees – an increase that may put off some customers who may not understand why it’s necessary.

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