Economic toll of gas crisis

If and when asked, one can instantly mention a long list of hurdles to industrialisation of Bangladesh. And the gas and power crisis, along with real or perceived sense of political instability, will surely be placed at the top of that list. The problem of power has largely been resolved, albeit in an expensive manner. Besides, efforts are on to find out a lasting as well as cheaper solution to the power crisis. But, unfortunately, the problem with the supply of natural gas appears to be unrelenting and indications are strong that the crisis might aggravate in the coming days.

In the meanwhile, gas shortage has been taking a huge toll on the economy in general and on industries in particular. Many existing gas-based industries are either closed or running well below their capacity. A good number of units -- an estimate by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) puts the figure at around 500 -- have not been able to start production for non-availability of gas connections. These industrial units have invested funds worth billions of Taka. The government since 2009 has put on hold gas connections to new industries. There is a high-powered committee at the Prime Minister's Office (PMO) to decide on the gas connections to industrial units. But it has reportedly not met even for once during last eight months.

Leaders of a number of chamber bodies, while talking to this paper recently, highlighted the plight of entrepreneurs who had borrowed funds from banks to get their industrial units installed. The delay in launching their industrial units is punishing them, both financially and psychologically. They are counting bank interests in substantial amounts of money every month. In fact, most industries that are starved of gas have become sick even before their going into operation. These units would not be burden on their owners alone. The banks too would be victims of the inordinate delay in making available gas to many industrial units across the country.

However, a part of the blame for the current deplorable situation goes to the entrepreneurs concerned also. The owners of the old industries that are not getting sufficient gas have no option but to suffer. But the sponsors of new industrial units could have avoided their sufferings, for the crisis of gas is nothing new as it had surfaced acutely in the early 2000s. They should have thought twice before embarking on gas-based industries. The government agencies concerned should have also discouraged the entrepreneurs from setting up gas-based industries under the prevailing circumstances.

As it seems, the gas supply situation is unlikely to improve anytime soon. The on-shore exploration activities are virtually non-existent. The prospect of any early start of offshore exploration is remote. The reported refusal by a US oil company to sign deal on an offshore block has actually made things difficult for the Petrobangla. The government, however, cannot allow the energy crisis to become unmanageable and should engage itself without further delay in the task of making available alternative sources of energy at an affordable cost.