Gas Gamble Gone Wrong

Bangladesh's industrial sector faces a mounting energy crisis that threatens its export-driven recovery, despite recent improvements in foreign exchange reserves.

- Mollah Amzad Hossain

Chronic shortages in gas and electricity have forced many factories to shut down, with no immediate relief in sight. Promised supply increases have yet to materialize, and infrastructure constraints coupled with policy inertia limit short-term solutions. Without decisive action, the worsening energy crunch could derail industrial growth and undercut hard-won gains in the external sector.

With a steady rise in export earnings and remittances, Bangladesh has begun to recover from a severe shortage of foreign exchange, and its external reserves are gradually building up. These developments have enabled the government to loosen its grip on the exchange market, apparently in response to meeting the conditions of an IMF loan. Meanwhile, the government has cleared almost all the outstanding bills of gas and electricity suppliers to ensure a smooth energy supply.

However, industrial entrepreneurs are, on the other hand, facing utter frustration due to the unmanageable challenges of keeping their operations running amid a chronic gas supply crisis. Industries also suffer from an unreliable supply of quality electricity from the grid. Amid poor supplies of gas and electricity, many SMEs and medium-sized industries have shut down. Even many large and export-oriented industries have become unviable.

In response to intense lobbying by business leaders, the Energy Adviser promised to supply an additional 250 MMCFD of gas to industries. However, there has been no improvement in the gas supply so far, and under the prevailing conditions, it is highly unlikely that gas supply to industries will increase soon. This is deepening the frustration of the business community. Without contingency measures to remedy the situation, the country's export earnings could be adversely impacted.