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The private sector is facing a deepening crisis as persistent gas shortages and repeated energy price hikes have slashed output up to a half in key industries, sparking concerns over economic growth, employment, and competitiveness of Bangladesh's manufacturing base, economists and industrialists warned.
The caution came during a policy dissemination event titled "Bangladesh Industrial Energy Efficiency Policy: A Draft for Sustainable Progress," jointly organised by the Dhaka Chamber of Commerce and Industry (DCCI) and the South Asian Network on Economic Modeling (SANEM) at the DCCI Auditorium on Saturday.
DCCI President Taskeen Ahmed said production in major sectors --including textiles, steel, and fertilisers -- declined by 30-50 per cent following a record 178 per cent surge in gas prices in FY2023-24, coupled with a further 33 per cent hike recently imposed on the industrial sector.
He added that the rising production costs driven by these energy price increases compelled many small and medium enterprises (SMEs) to halt operations, deepening the sector's vulnerabilities.
Jalal Ahmed, Chairman of the Bangladesh Energy Regulatory Commission (BERC), attended the event as the chief guest, while Dr. Md. Rafiqul Islam, Member of the Bangladesh Energy and Power Research Council (BEPRC) Dr. M. Rezwan Khan, Chairman of Power Grid Bangladesh PLC Manwar Hossain, Chairman of Anwar Group of Industries, and private sector representatives shared their insights on the keynote paper presented by Dr. Selim Raihan, Executive Director of SANEM.
Presenting the keynote, Dr Selim Raihan said that although Bangladesh had a master plan for the energy sector, due to the absence of supportive policies the industrial sector was struggling.
He added that energy efficiency was not clearly or uniformly defined for industrial applications, as a result, industries were not uniformly incentivized to adopt energy-efficiency practices.
He said awareness about energy efficiency, energy audits, energy conservation, financing and incentives, grid modernisation, implementation and communication were identified as key priorities.
Dr Raihan emphasised the importance of a structural strategy, supply-side strategy and policy and regulatory strategy for the sector.
"Although the experts have often sounded the alarm that Bangladesh will no longer have domestic gas reserves after 2030, it is very unfortunate that there has been no significant progress in either offshore or onshore gas exploration," said Jalal Ahmed.
As a result, the country was unable to utilise its own gas resources, rather depends heavily on imported gas, he added.
Jalal Ahmed said that the current efficiency level in the energy sector was around 30 per cent and overall shortages, particularly in electricity sector, could significantly be reduced through improving efficiency.
Dr. Md. Rafiqul Islam said that reliance on imported energy increased business costs. He emphasized the need to prioritise domestic energy resources.
He mentioned that energy imports amounted to around $20.0 billion in the last fiscal year, indicating an ample opportunity for greater private-sector involvement.
Dr. M. Rezwan Khan said that without revising the existing tariff structure, it would not be possible to resolve the ongoing problems of the sector. He added that electricity tariffs must be differentiated between peak and off-peak hours.
Manwar Hossain said that the government must prioritize the supply of electricity to industries, as inadequate energy supply is causing nearly 50 per cent production disruption across many industries which are very alarming for the economy.
Mohammed Amirul Haque, President, Bangladesh Cement Manufacturers Association (BCMA), said that the LPG sector could play an effective role in ensuring the country's energy security. However, instead of financial incentives, the sector faced nearly 10 per cent taxation, which the government needed to reconsider, he said.
DCCI President Taskeen Ahmed said in his opening remarks, the energy sector was undergoing a prolonged and complex crisis, with uninterrupted supply for industries emerging as a critical challenge that directly disrupted production, investment, and economic stability.
Despite representing only 19 per cent of total gas consumers, the industrial sector faced an acute existential threat, aggravated by sharp supply shortages and rising operating costs, he added.
"Local gas field production has steadily declined this year, creating daily shortfalls of approximately 2,000 MW of electricity and over 1,000 Million Cubic Feet per Day (MMcfd) of gas, severely constraining industrial output across key sectors," he said.
He emphasized energy efficiency and said system losses exacerbated the problem further, with an estimated 174 MMcfd of gas wasted daily, highlighting inefficiencies in the energy distribution network that cannot be ignored under current conditions.
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