Last Thursday, a group of workers from Mahmud Jeans mercilessly assaulted the factory's deputy managing director, Rafee Mahmud, who is also the son of the factory owner and responsible for overall management of the factory. A spokesperson of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) claimed that the factory had been forced to cease operations due to a severe gas crisis. Despite this, the management had managed to clear the workers' salaries before shutting its doors. However, a group of workers began protesting, demanding the service benefits they were entitled to receive after the layoff.
Being financially distressed, the DMD was negotiating to sell off his property in Banani area to clear the outstanding payments of the workers in line with a tripartite agreement. Unfortunately, the angry mob allegedly refused to give the required time for this process and brutally attacked the DMD. While the mob attack is strongly condemnable and the perpetrators need to be booked, this incident signifies the devastating consequence of gas crisis for factory owners, workers, and the national economy as a whole.
Bangladesh has been grappling with a severe gas crisis for the past two years, driven by dwindling domestic production and an unstable supply of imported Liquefied Natural Gas (LNG). The country's daily demand for natural gas stands at approximately 4,000 million cubic feet (mmcfd) per day. However, domestic production has been steadily declining, currently standing at only about 2,000 mmcfd per day. To mitigate this shortfall, the government imports LNG through two Floating Storage and Re-gasification Units (FSRUs) at Maheshkhali, which collectively supply around 1,000 mmcfd to the national grid. Even with this imported supply, the total daily gas supply stands at about 3,000 mmcfd, leaving a significant deficit of around 1,000 mmcfd.
This shortfall has severely impacted both household and commercial consumers, with the industrial sector bearing the brunt of the crisis. Industries such as textiles, ceramics, and steel, all heavily reliant on uninterrupted gas supply, are struggling to sustain operations. To highlight the gravity of the ongoing energy crisis, Bangladesh Chamber of Industries (BCI) recently organised a seminar where a keynote paper presented by Prof. Dr. Ijaz Hossain, a former professor of BUET, revealed a terrible cost of gas crisis on industries.
According to his findings, gas crisis has led to a production decline in garment sector by 30-35 per cent, in steel factories by 25-30 per cent, and in ceramic factories by 50 per cent. Moreover, factories' increased reliance on diesel generators has significantly raised operational costs, posing severe challenges for small-scale industries, particularly in rural areas. As a result, approximately 40 per cent of these small industries are reportedly on the verge of closure.
Even though industries are badly affected and industrialists are pleading with the government to solve the problem earnestly, there appears to be no immediate end to their woes. While LNG provides a costly short-term solution, the interim government, unlike the previous Awami League administration, appears reluctant to increase the country's reliance on energy imports, primarily due to high import costs and vulnerability to global market fluctuations. It has already cancelled MOUs signed by the previous Hasina administration for establishing two additional FSRU regasification units. Instead, the current government is prioritising the drilling of new gas fields and expanding renewable energy sources. While these measures appear promising on paper, they require a time-consuming process and cannot address the current energy shortfall. The energy advisor states that the situation is unlikely to improve until any new gas field is developed. But the question is, can industries afford to wait that long?
It is, therefore, imperative for the government to immediately look at some short term options to meet industrial demand for gas.
At the BCI seminar, business leaders categorically told the energy advisor, "Give us gas, and we will give you dollars." Therefore, until an alternative is available, importing adequate LNG and increasing LNG storage and supply capacity should not be taken off the table.
At the same time, increasing extraction capacity from existing gas fields by adopting advanced technology can offer some relief. As reports from Petrobangla and the Ministry of Power, Energy, and Mineral Resources show, extraction from local gas fields is far below their actual capacity. For instance, the Bangladesh Gas Field Company, despite having a capacity of 815 million cubic feet per day (mmcfd), is currently producing only 555 mmcfd. Similar shortfalls are evident in the Sylhet Gas Field Company and Bapex.
According to Dr. Badrul Imam, an honorary professor at the Department of Geology, University of Dhaka, Petrobangla had engaged Schlumberger to identify ways to boost gas production from existing fields. After carrying out their work for a year or so, Slamburger found that production in the country's gas fields was low due to technical weaknesses. The company recommended certain simple technical management in these fields, basically involving certain repairs, adjustments and addition of certain equipment (such as tubing with a wider diameter), etc. But Petrobangla did not undertake any operations to carry out these recommendations. He thinks the authorities can optimise gas production from local gas fields by adopting advanced technologies and best practices.
Besides, it is indeed an irony that when the country is grappling with severe gas crisis, a massive 2.5 trillion cubic feet (tcf) of natural gas reserve is lying unused in Bhola. It cannot be utilised because of lack of pipeline. If measures can be taken to bring gas from the island district in the form of compressed natural gas (CNG) or liquefied natural gas (LNG), gas shortages in industries can be alleviated to some extent.
The gas crisis is not merely an energy issue; it threatens the viability of industries, livelihoods of workers and the nation's economic growth. The government must act swiftly to implement both short and long-term solutions. Failure to address the crisis could result in more factory closures, job losses, and a significant setback to the country's growth momentum. The lessons from Mahmud Jeans should serve as a wake-up call to prioritise industrial demand for energy before the situation worsens further.
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