The energy crisis in Bangladesh’s industrial sector is no longer merely a disruption to production; it is gradually emerging as a major threat to exports, employment, bank loan repayments, and the overall economy. Due to an acute shortage of natural gas, the production capacity of many gas-dependent factories has fallen by half. While some factories have been forced to suspend operations altogether, others are unable to run for more than a few hours a day. Bangladesh’s daily demand for natural gas is approximately 4 billion cubic feet, while the current supply stands at only around 2.2 to 2.3 billion cubic feet. This leaves a daily shortfall of nearly 1.8 billion cubic feet. The crisis is believed to have intensified following the shutdown of a floating LNG terminal in Maheshkhali. The impact has been particularly severe in major industrial zones, including Gazipur, Savar-Ashulia, Narayanganj, and Narsingdi. According to industrial entrepreneurs, many factories require a gas pressure of 10 to 15 PSI to maintain production, but are currently receiving only 1 to 3 PSI. As a result, keeping boilers, generators, and heavy machinery operational has become increasingly difficult. The impact is being felt directly across export-oriented industries, including ready-made garments, textiles, steel, ceramics, paper, and dyeing. The use of alternative fuels such as diesel and LPG is also driving up production costs and weakening Bangladesh’s competitiveness in international markets. Shawkat Aziz Russell, president of the Bangladesh Textile Mills Association, says more than 50 factories have completely suspended production due to the gas crisis. He fears that if the crisis persists, industrialists will exhaust their working capital, increasing the risk of further business closures as companies struggle to repay bank loans. Therefore, the energy crisis can no longer be treated as a temporary problem. Keeping industries operational has now become a matter of protecting the economy itself. Ensuring uninterrupted gas supplies to the industrial sector during this critical period, while urgently adopting a long-term energy strategy, may be the most effective way to shield the economy from a major economic shock.

Author: Mrinmoyee Sharmin, Economist and Investment Analyst, Sydney