Bangladesh’s gas crisis should no longer be understood simply as an energy shortage. It is increasingly becoming a test of whether the country can sustain the industrial model on which much of its economic ambition depends. When gas pressure falls, the immediate victims are factories. But the eventual victims can be workers, banks, exporters, consumers, investors and, ultimately, the wider economy.
The warning signs are already visible. For nearly three weeks, gas shortages have severely disrupted production across several industrial zones. Steel, glass, ceramics, cement, chemicals and other gas-intensive industries have been forced to reduce output or suspend operations altogether. In Gazipur, hundreds of factories have reportedly halted production, while 171 factories in Habiganj have also been affected. These are not isolated business problems. They are signs of an economy losing productive capacity.
The most immediate concern is employment. More than 150,000 workers are associated with the affected factories in Habiganj alone. When production stops, workers do not simply lose a few hours of work. Their household incomes become uncertain. A worker who earns less spends less at local shops. A transport worker carries fewer passengers. A small food vendor near a factory loses customers. A supplier receives fewer orders. The economic damage therefore travels much further than the factory gate.
Yet perhaps the more serious problem cannot be seen on the streets. Factories may stop producing, but their financial obligations continue. Bank loans do not pause because a furnace has stopped working. Interest does not disappear because gas pressure has fallen. Machinery still requires maintenance, warehouses still require security, imported raw materials still have to be paid for, and businesses remain liable for taxes, utilities and other operating expenses.
A prolonged interruption can therefore transform a temporary production problem into a financial problem. An otherwise viable company may gradually become unable to service its loans. If enough firms reach that point, the consequences could eventually appear in the banking sector as well.
The current shortage has exposed how fragile Bangladesh’s gas supply structure has become. Domestic production has been declining for years, while demand has continued to increase. According to Petrobangla data, domestic gas production has fallen from around 2,800 million cubic feet per day to roughly 1,627 million cubic feet. National demand, meanwhile, is around 3,800 million cubic feet per day, leaving a substantial gap between what the country needs and what its own fields can supply.
LNG imports have filled part of that gap. But dependence on imported gas creates another vulnerability. Bangladesh’s two existing floating LNG terminals have a combined capacity of around 1,100 million cubic feet per day. When one terminal becomes unavailable, the impact is felt across the entire distribution system. A single technical failure can therefore translate into production losses for hundreds of businesses.
The problem becomes even more complicated because global LNG markets are themselves vulnerable to geopolitical shocks. Bangladesh cannot control international gas prices, shipping disruptions or conflicts affecting major LNG-producing regions. If domestic production declines while imported supplies become uncertain or expensive, local industries are effectively exposed to events over which they have no influence.
An investor may be prepared to spend hundreds of crores of taka on machinery, land and buildings. But such an investment is based on the assumption that the factory will be able to operate for years. If the availability of gas remains uncertain, the calculation changes. The question is no longer simply whether Bangladesh is an attractive place to manufacture. It becomes whether Bangladesh can guarantee the basic conditions required to manufacture.
That matters because the country is already trying to attract new investment and expand industrial production. Petrobangla had projected industrial gas demand at 1,103 million cubic feet per day for 2025-26 and 1,267 million cubic feet for 2026-27. Total gas demand was projected to rise from 4,176 million cubic feet per day to 4,534 million cubic feet per day over the same period. The direction is unmistakable: demand is rising faster than the existing system can comfortably accommodate.
The suspension of new industrial gas connections makes the contradiction even sharper. Reports suggest that around 1,857 applications are waiting for connections. For an economy seeking industrial diversification, every delayed connection represents more than an administrative backlog. It may mean a factory that cannot start, capital that remains idle and jobs that are never created.
The export sector faces an additional risk. Modern manufacturing depends on interconnected supply chains. A garment exporter may appear to be the final producer, but its ability to meet an order depends on spinning mills, textile factories, dyeing and finishing units, chemical suppliers, packaging companies, transport operators and ports. If one link becomes unreliable, the entire chain can be disrupted.
Foreign buyers are unlikely to treat repeated delays as a temporary inconvenience forever. They have alternatives. Countries competing with Bangladesh for manufacturing orders are also trying to improve their infrastructure and supply reliability. A buyer who moves an order elsewhere may eventually decide that the alternative supplier is more dependable.
There is also a danger of a vicious cycle. Lower industrial production means lower demand for raw materials and transport services. It reduces business activity and potentially government revenue. Companies facing lower revenues become more cautious about investment. Lower investment slows industrial expansion. Reduced industrial expansion weakens future employment and export growth. The original gas shortage then produces a much larger economic consequence.
The country needs to accelerate domestic gas exploration, particularly offshore exploration, while improving recovery from existing fields. The potential of gas resources in Bhola also deserves serious attention. At the same time, LNG infrastructure needs to be expanded with sufficient backup capacity so that the failure of one facility does not create a national supply shock.
Renewable energy must also be considered more seriously in industrial planning. It cannot replace natural gas overnight, particularly for industries requiring high-temperature processes. But a diversified energy portfolio can reduce pressure on the gas network over time. Energy efficiency should receive similar attention. Reducing industrial waste and improving the efficiency of gas consumption can effectively create additional supply without discovering a new gas field.
Most importantly, the government needs a transparent strategy for managing shortages. When supply is inadequate, industries should not have to operate in an atmosphere of uncertainty about when gas will arrive or disappear. Critical sectors, export-oriented industries and essential production should be managed according to clearly communicated priorities.
The larger lesson is uncomfortable but unavoidable. Bangladesh’s industrial growth has often been discussed in terms of investment, exports, labour costs and infrastructure. Energy security deserves to be placed at the centre of that conversation. No country can build a durable industrial economy if factories are unable to predict whether they will have enough energy to operate.
The views expressed in this article are solely those of the author
The writer is an academic, journalist, and political analyst. E-mail: [email protected]
