A severe gas crisis in the Gazipur industrial area has severely disrupted production, causing delays in yarn deliveries. Several Industrial reportedly informed that like many others in the area, has been struggling with the gas shortage for a considerable time, severely affecting its production.
Many more textile mills in important industrial hubs such as Tongi, Joydebpur in Gazipur, Bhaluka in Mymensingh, Palash, Madhabdi in Narsingdi, and Savar and Ashulia in Dhaka have been affected by the acute gas shortage for more than a month.
Textile millers report that the gas problem has reduced production in 80 per cent of the country’s mills to an average of 40 per cent. They believe that this will impede their capacity to supply raw materials to RMG companies on time, reducing earnings from the country’s principal export product.
Earlier, in January 2023, the Government hiked petrol prices by up to 179 per cent, saying that the additional funds would be used to acquire LNG from the spot market to ensure a consistent supply. However, despite manufacturers paying higher costs for more than a year, the gas supply failed to meet expectations, resulting in serious production delays, according to industry sources.
They noted that the country’s gas dilemma is not a new issue, as the industrial sector has always faced shortages due to supply not reaching demand. Currently, the country requires approximately 4,000 million cubic feet (mmcf) of petrol per day, but only about 3,050 mmcf is provided, with industries receiving roughly 600 mmcf/d, considerably short of their 1,200 mmcf/d requirements.
To alleviate the situation, the Government started importing LNG at the end of 2018. However, LNG prices rose in 2022 as a result of the Ukraine-Russia war, and the Government halted imports due to low foreign exchange reserves, instead turning to the global spot market. As local gas production is insufficient, the country has become increasingly reliant on imports, establishing two floating terminals at Maheshkhali in Cox’s Bazar to import LNG and convert it to gas for pipeline supply.
According to industry insiders, Cyclone Remal caused a new gas crisis when it damaged a terminal on 27th May and was subsequently shipped to Singapore for repair, causing more disruptions in the industrial sector.
