Bangladesh’s industrial sector is taking a heavy hit from the worsening gas crisis, which is raising operating costs and threatening the country’s export competitiveness.
Gas-dependent sectors, including textiles, spinning, ceramics and fertilisers, are operating below capacity or facing production delays due to low gas supply and weak pipeline pressure, brought on by the shutdown of one of the two floating storage and regasification units on July 21 due to a technical fault.
The shutdown has curtailed the national gas supply by about 450 million cubic feet per day (mmcfd), or 17 percent.
The gas crisis is disrupting production across the textile and garment value chain, where meeting delivery deadlines is critical, said Shams Mahmud, managing director of Shasha Denims.
His factory requires 8 pounds per square inch (PSI) of gas pressure but is receiving only 2-3 PSI, forcing production slowdowns while also damaging machinery.
Erratic gas pressure is causing heavy losses in dyeing operations, where interrupted production can ruin entire fabric batches.
Many factories have switched to diesel to keep production running, raising operating costs by about 20 percent.
“But buyers are unwilling to absorb the additional expense,” said Mahmud, also a former president of the Dhaka Chamber of Commerce and Industry.
One such factory that is now relying on diesel belongs to Bombay Sweets. That has more than doubled energy costs, according to its chief finance and operations officer Rajib Kumar Saha.
Electricity generated from gas costs Tk 14-15 per unit, compared with nearly Tk 34 using diesel.
Higher production costs are ultimately pushing up product prices, while diesel-powered boilers still fail to deliver the required output, leaving some machines idle.
The gas shortage has cut Bombay Sweets’s production by 30-40 percent, he said.
Calling the past few days the worst period of the crisis, Saha said the company’s packaging unit, Toys Pack, has stopped accepting new orders until gas supplies normalise to avoid missing delivery commitments.
Food manufacturers are among the hardest hit from the gas shortage because their operations depend heavily on natural gas, said Mohammed Amirul Haque, managing director of Delta Agrofood Industries.
“We are suffering, but we do not see a practical solution. The higher production cost is directly pushing up the cost of our products,” Haque said.
The ceramic industry is also facing severe disruptions.
“The biggest challenge is not the volume of gas but unstable pressure,” said a senior official of Fresh Ceramics, whose factory is currently receiving only 15-16 PSI against a requirement of 30-35 PSI.
Ceramic kilns require a constant gas flow during a 24-hour firing cycle, and even brief interruptions can ruin an entire batch.
Under normal conditions, about 90 percent of output meets quality standards, but during severe gas disruptions the success rate can fall to just 10 percent, he added.
The gas crisis has crippled knitwear factories, leaving production planning almost impossible because there is no certainty over gas supply, said Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association.
Low gas pressure leaves fabric trapped inside processing machines, which must keep running to avoid damage, driving up electricity costs.
“But workers’ wages and utility bills must be paid, come what may -- industries are gradually becoming sick.”
The crisis has intensified pressure on exporters already struggling with weak orders. Production delays are forcing some manufacturers to use expensive air freight to meet delivery schedules, he added.
