PHOTO: HABIBUR RAHMAN

REFAYET ULLAH MIRDHA and SOHEL PARVEZ

A deepening energy crisis is hitting industries in Bangladesh hard, forcing them to cut production by as much as 50 per cent as escalated import bills have forced the country to lower gas purchase from international sources.

Compared to May 2021, there has been 65 per cent increase in fuel price in May this year, according to the budget document of the government.

Similarly, liquified natural gas (LNG) prices have hit record levels internationally, fueled by higher energy prices in the global markets exacerbated by the Russia-Ukraine war.

Since the government has decided, for the time being, not to buy LNG from the international spot market, gas supply has fallen since June 30 amid lower domestic production.

This has hit the generation of electricity in a country where power production accounts for around 70 per cent of the total gas consumption.

As a result, the industries and businesses in Bangladesh are in trouble since production halved while the cost of production is rising.

“We have suggested the government enforce load-shedding to save energy bills but the supply should be given to industries on a priority basis,” said Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

“But the load-shedding and gas crisis are taking place across the industries. As a result, businesses are incurring losses amid the production fall.”

Consumers, individuals, industries and businesses alike, have been enduring severe power cuts for the last few days as electricity production was hampered mainly due to a shortage of gas supply.

This prompted the FBCCI to urge the government yesterday to go for power rationing.

The Bangladesh Power Development Board and other power and gas suppliers need to sit together as soon as possible to determine the priority when it comes to enforcing power cuts and gas rationing, said Jashim.

“Industries and other vital services sectors like hospitals should be prioritised and remain out of the purview of load-shedding and gas rationing.”

Owing to the severe gas crisis, the production in the spinning and weaving mills in the industrial zones has halved in the past 11 days.

The millers are worried about whether they would be able to keep their production up and running amid the deepening energy shortage.

Any hamper in production at primary textile mills means a delay in garment manufacturing which will ultimately compel producers to go for costlier air shipment of goods or face a big discount from international retailers and brands or in the worst case, the cancellation of work orders, industry insiders say.

As a result, the whole supply chain will suffer and work orders may shift to other countries from Bangladesh, millers and exporters warned.

Israq Spinning Mills Ltd’s production has declined by 60 per cent recently.

On a normal day when the gas supply remains stable, the factory can produce 125 tonnes of yarn, said Md Fazlul Haque, managing director of the company located in Gazipur.

Like others, Haque begins the operation of his mills after 10:00pm when gas pressure increases a bit.