The country’s factories are reeling from an acute gas shortage, as allocations meant for industries are being diverted to electricity and fertilizer production.

As a result, production in various sectors — especially textiles — has dropped by 70% to 90%. Many factories are on the verge of shutting down, with the rise of export orders being cancelled and worker layoffs rising alarmingly.

Gas shortage paralyzes 400 factories

According to the Bangladesh Textile Mills Association (BTMA), nearly 400 gas-dependent factories are unable to operate at full capacity due to the crisis. Gas pressure has dropped to nearly zero in major industrial zones such as Gazipur, Konabari, Shafipur, Narayanganj, Dhamrai, and Manikganj, severely affecting textile and garments production.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Bangla Tribune that production-oriented industries are in dire straits due to gas and banking crises. The gas pressure is so low that machinery cannot be operated, forcing many entrepreneurs to shut down their factories and incur daily losses, he added. While electricity shortages persist, Hatem said that the gas crisis has become the most severe obstacle. In places like Dhaka, Narayanganj, and Ashulia, gas pressure is nearly nonexistent, making continued production impossible, he said.

Banking troubles add to the burden

Expressing dissatisfaction with the banking sector, Hatem added that banks are delaying back-to-back letters of credit (LCs) and are closing them if payments are overdue. This has led to missed shipment deadlines, forcing exporters to resort to costly air shipments or offer discounts, leading to regular financial losses, he said.

Gas demand far exceeds supply

A Titas Gas Transmission and Distribution Company official said that while Gazipur requires 600–700 million cubic feet of gas daily, only 450 million is being supplied. Consequently, factories are being forced to use costly alternatives such as diesel, LPG, and CNG, drastically increasing production costs, they added.

Major investment at risk

According to BTMA, Bangladesh currently has 1,854 textile factories with a total investment of $22 billion. Of these, around 900 are gas-dependent, especially spinning mills, which are among the hardest hit. These factories have invested between Tk100 crore to Tk1,000 crore, and disruptions in production are leading to cancelled orders and a growing risk of losing foreign buyers.

A private company chairman, requesting anonymity, said gas supplies were cut by 100 to 120 million cubic feet per day from February to April, leaving many factories virtually shut down.

Price hikes but no improvement in supply

Industrialists have complained that although gas prices were increased twice, the supply situation has not improved. They say this has made recovery difficult for many companies.

Former BGMEA director Mohiuddin Rubel told Bangla Tribune that many factories are unable to utilize their full production capacity, yet still have to bear the cost of energy and labour, which is eating into their capital. As a result, many are turning into loan defaulters, he added.

Shovon Islam, managing director of Sparrow Apparels in Gazipur, said: “Even after the gas price hike, we sometimes get gas for just two hours a day. This disruption in production is causing foreign buyers to shift orders to other countries.”

National supply gap reaches critical level

According to Petrobangla, while national gas demand stands at approximately 4,200 million cubic feet per day, only 2,698 million is being supplied — 1,842 million from domestic production and 856 million from imported LNG. This large gap between supply and demand is affecting not just industries, but also CNG stations and residential areas.

A Titas Gas operations officer explained that gas supply to industries has been reduced to prioritize power generation due to rising temperatures. LNG supply might improve next month, he said, adding that many industries may already suffer irreversible damage by then.

The situation is no better in Chittagong. Karnaphuli Gas sources say the region is facing a daily shortage of 30–33 million cubic feet of gas. The fertilizer factory CUFL has been shut for 18 days, and ceramic industry production has declined by 50% to 75%.

Looming recession

Experts warn that if the gas crisis continues, the country’s industrial sector may face a severe recession. Investment, employment, and export growth could all take a massive hit. Industry owners have written several letters to the Petrobangla chairman, urging the immediate normalization of gas supplies.

They argue that uninterrupted gas supply is now critical to saving the industrial sector and keeping the economy afloat. In key industrial areas like Narayanganj, Gazipur and Tongi, gas pressure has dropped so drastically that some factories are operating at just 30% to 40% capacity. More than $70 billion in investments is now at risk.

Daily industrial gas needs — especially for spinning, dyeing, and printing — stand at around 2,000 million cubic feet, but supply falls well short of this.

BTMA and BKMEA say each spinning mill is losing an average of Tk25 lakh per day due to the crisis. Meanwhile, US President Trump’s proposed new tariff policy, though currently on hold, has created uncertainty among Western buyers. This has delayed new export orders, making the situation even more complex.

Currency devaluation worsens the crisis

Added to this is the devaluation of the taka against the US dollar. In just two years, the exchange rate has climbed from Tk85 to Tk122 per dollar. This has increased import costs for cotton and machinery and triggered a working capital crisis.

BTMA President Showkat Aziz Russell said: “Just when the industry was recovering from the Covid-19 [pandemic], war, and currency shocks, it is now facing fresh challenges with gas shortages and tariffs.” Without immediate and effective solutions, he warned, many factories may shut down.

Export income already in decline

The crisis has already begun to affect export earnings. According to data from the Export Promotion Bureau (EPB), export earnings fell to $3.01 billion in April — the lowest in the current fiscal year.

This is nearly $1.24 billion less than in March. The decline in woven garment exports and the overall slowdown in the apparel sector are largely to blame.

News Link: Is gas shortage pushing industrial sector towards collapse?