Gas crisis pushing factories to the brink of closure, owners warn

Many factories in Gazipur’s Konabari, Kashimpur, Basan, and Tongi are struggling to operate due to the gas shortage.

There are more than 800 large and small garment factories, 120 factories listed under the Bangladesh Knit Dyeing Owners Association and over a hundred more dyeing factories in Narayanganj. Many of these factories are also experiencing significant disruptions.

Consequently, workers are clocking in to factories but remain idle for most of the day, with an 8-hour workday now extending to 16 hours and resulting in daily losses worth hundreds of thousands of taka, reports bdnews24.com.

Industrialists are concerned that the ongoing gas crisis, which has been affecting the supply of the industry's main fuel, is pushing these long-operating factories to the brink of closure.

The crisis has also raised fears of an increase in unemployment and disruptions in export activities.

Amid the ongoing crisis, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) convened an emergency meeting at their head office in Narayanganj.

The organisation's President AKM Salim Osman expressed concerns, warning that a continued lack of gas supply could force garment factories to shut down.

"We cannot be held accountable for this," Osman said. "The potential closure of factories could affect 300,000 workers. How are we to bear the costs if we can't operate due to lack of gas, despite being willing to pay for it? We've made numerous attempts to resolve this issue, but to no avail."

Osman also raised suspicions about the timing of the gas crisis, saying, "Just before the election, we had gas for about 10 to 12 days. But seven days after the election, the situation deteriorated again. If it's indeed a crisis, how was gas available before the elections, and why is it scarce now? Winter isn't a new phenomenon."

He cautioned that if the gas crisis persists, the impact could be "2,000 times worse than what we experienced during the COVID pandemic".

Highlighting the importance of the knitwear sector, Osman pointed out that it accounts for 52 percent of Bangladesh's total exports, translating to about Tk 25 billion per month.

"Knitwear is our highest earning sector, indirectly employing 1.5 million people. But now, due to the gas shortage, this sector is on the brink of closure."

Fazlee Shamim Ehsan, another BKMEA leader, emphasised the critical role of gas in the garment manufacturing process, particularly for dyeing, which is essential for producing clothing.

"Without gas, we can't run our dyeing units. For the last few days, this has been impossible, disrupting our garment production and leading to a decline in exports," he said.

Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), flagged the dire consequences of the fuel shortage for the garment industry.

"Without proper fuel supply, not only will factory operations be hindered, but the machinery will also suffer damage. A production decline due to fuel shortages will threaten the very survival of the industry."

The textile sector, closely tied to the garment industry, is also severely impacted.

Monsoor Ahmed, additional secretary general of the Bangladesh Textile Mills Association (BTMA), said that the gas crisis has reached a critical point over the past month, severely hampering production.

"The production process has almost come to a halt. We're not even operating at 30 percent capacity. Despite the reduction in work, we still have to pay our workers."

"Of the approximately 1,700 BTMA members, at least 500 operate captive power plants that rely on line gas. About 90 percent of these factories are experiencing severe gas shortages, rendering them unable to generate electricity. This has also affected the operation of dyeing boilers, which require gas to function."

WHAT'S CAUSING THE GAS SHORTAGE?

The ongoing gas crisis is primarily attributed to the maintenance of floating LNG terminals at sea and a reduction in gas extraction from domestic wells.

Over the last two months, the national transmission lines have seen a decrease of about 500 million cubic feet in daily gas supply, amounting to roughly a 20 percent reduction.

Although one LNG terminal has resumed operations post-maintenance, another is scheduled for a 45-day maintenance period.

Officials have indicated that this will prolong the current gas shortage.

The crisis has also impacted the production of gas-based power plants, leading to load shedding of up to 700 MW even during the winter.

Alarmingly, Chattogram, the country's main industrial and port city, experienced a complete gas shutdown for two days on Friday and Saturday.

Addressing the situation, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said on Sunday that a setback occurred while reconnecting a Floating Storage and Regasification Unit (FSRU) after maintenance, leading to the recent widespread gas and electricity crisis.

He reassured that the situation would normalise to some extent in the next one or two days as the problem has been resolved.

However, with the government eyeing uninterrupted gas and electricity supply around the fasting and irrigation season in March, there seems to be little hope that the crisis will be fully resolved before then.