Bangladesh’s industrial sector is grappling with an escalating gas crisis, which is severely disrupting production across multiple key industries. The gas shortage has forced the shutdown of over 200 factories in recent months, with another 300 factories facing imminent closure unless the situation improves. This crisis has led to significant production cuts in essential sectors such as ceramics, textiles, and steel, with output dropping by nearly 50%.
Declining Production and Economic Impact
Entrepreneurs are warning that the ongoing gas and power shortages have pushed the sector into a state of crisis, directly impacting the country’s export earnings and economic stability. With declining local production, the sector faces a domino effect—slowed investments, reduced employment growth, and a sharp fall in export revenue.
Industry insiders note that the gas shortage has already contributed to a significant reduction in imports. Industrial raw material imports have fallen by nearly 10%, and machinery imports have decreased by over 40%, further hindering growth prospects. The gas supply shortfall is partly due to declining local production, which has exacerbated the shortage across industrial factories, residential areas, CNG stations, and power plants.
Struggling Industries and Widespread Shutdowns
Regions such as Gazipur, Narayanganj, Narsingdi, and Savar, which are home to numerous factories, are witnessing a sharp decline in production as a result of low gas pressure. In these areas, some factories are operating at a mere 25% of their capacity, while others have ceased operations altogether. For instance, ceramic production in Gazipur and Narsingdi has dropped by 50%, and factories in Savar and Dhamrai are operating at significantly reduced capacity.
Moinul Islam, President of the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), confirmed the dire situation, stating that the sector has been hit hard by the lack of gas supply, which has directly impacted output and overall business operations.
Gas Supply Shortfall and Alternative Measures
According to Titas Gas Transmission and Distribution Company, the daily gas demand in its distribution area is approximately 2,400 million cubic feet, but the supply only meets 1,550–1,600 million cubic feet, resulting in a significant shortfall. Nationally, the total daily gas demand stands at 4,200 million cubic feet, yet the supply is limited to just 2,741 million cubic feet, creating a shortfall of 1,459 million cubic feet. This gap is partly filled by LNG imports, but the demand still far exceeds the available supply.
To cope with the shortages, many factories have turned to alternative, more expensive fuels like diesel to maintain operations, further increasing production costs. Pallab Group’s admin manager, Md. Mostakim, highlighted that reliance on diesel has significantly raised expenses, despite it being a temporary solution.
Declining Growth Rates and Economic Concerns
The long-term consequences of this gas shortage are becoming increasingly evident. The industrial sector’s growth rate has sharply declined, falling from 10.29% in FY 2020-21 to just 3.98% in the first quarter of FY 2024-25. Between March and September 2024, 200 factories shut down, and 300 more are at risk if the energy crisis continues.
Anwar-ul-Alam Chowdhury, President of the Bangladesh Chamber of Industries (BCI), stressed that without urgent action, the sector’s growth trajectory will remain at risk, with both short-term and long-term repercussions for the country’s economy.
Potential Solutions and the Road Ahead
The energy crisis has been exacerbated by logistical challenges. Although Bhola has ample gas resources, the lack of infrastructure to transport this gas to Dhaka and key industrial zones is preventing its full utilization. Experts suggest that converting this gas to LNG and developing the necessary pipelines could alleviate some of the pressure on the industrial sector.
Faujul Kabir Khan, Adviser to the Ministry of Power, Energy, and Mineral Resources, emphasized the need for infrastructure development to improve gas distribution, which could help stabilize the situation in the short term.
Conclusion
The ongoing gas shortage represents a critical challenge for Bangladesh’s industrial sector. Unless immediate and comprehensive solutions are implemented, the country risks continued economic stagnation, loss of export competitiveness, and reduced industrial output. The government and industry leaders must work together to address these challenges to avoid further damage to the economy.
