Gas Crisis Leaves Bangladesh With Load-Shedding And Waiting

Bangladesh is facing a deepening gas and electricity crisis, with the government acknowledging that its immediate options are severely constrained until a damaged floating liquefied natural gas terminal is repaired and returned to operation.

Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud said the government currently has little choice but to manage load-shedding, prioritise available gas supplies and wait for engineers to complete repairs to the floating storage and regasification unit, or FSRU.

Speaking at a policy dialogue titled ‘Navigating Bangladesh Energy Crisis: Immediate Priorities and the Path to a Sustainable Energy Future’ at BRAC Centre in Mohakhali on Thursday, the minister said the crisis could not be resolved simply by increasing domestic gas production in the short term. He explained that without the functioning FSRU, imported LNG cannot be properly regasified and supplied to the national grid.

The minister said the current disruption began after a fire at the LNG terminal. Foreign engineers from the United Kingdom and Singapore are working on the repair, but the process has created significant limitations for the country’s energy supply system.

He said the immediate task was to reduce the impact of load-shedding while trying to ensure that industries receive as much gas as possible. Once the repair work is completed, two new boilers will have to be brought into operation simultaneously. The entire system may then need to remain shut for about 72 hours for technical coordination, potentially creating another period of acute gas shortages.

The government is also looking beyond the immediate crisis. According to the minister, a new FSRU has already been ordered, while plans are being considered to establish three additional FSRUs at Payra, Mongla and Hiron Point by 2029. The longer-term objective is to expand LNG-handling capacity and reduce the vulnerability created by dependence on a limited number of import facilities.

Efforts are also under way to supply gas directly to industrial users through alternative arrangements. The government has permitted 30 container trucks to transport gas from Bhola to factories. Discussions are also taking place with a Malaysian company over a system that could allow gas to be supplied directly in containers.

The electricity situation is being complicated by rising demand. The minister described battery-powered rickshaws as the ‘Tesla of the poor’ and said many of them are reportedly charged through illegal connections after midnight. This has shifted a significant portion of electricity demand into the late-night period, with total demand reaching around 18,000 megawatts. He also said government officials have faced attacks while attempting to disconnect illegal electricity connections.

The minister addressed concerns over fuel supplies as well, saying rumours surrounding oil shortages had contributed to public anxiety. He said the government was preparing a policy under which private companies meeting specified conditions would also be able to import oil, rather than allowing any single organisation to dominate the market.

The government is also seeking to encourage renewable energy. Import duties on solar batteries and inverters have been reduced to 5 per cent, while a five-year tax holiday has been offered to support investment in the sector.

The minister, who described himself as an entrepreneur, said he understood the financial pressure faced by factory owners when production is disrupted. Businesses must continue paying workers and servicing bank loans even when factories cannot operate at full capacity. He said the government was therefore exploring every available option to ease the crisis.

At the dialogue, the Centre for Policy Dialogue presented a broader assessment of the country’s energy vulnerabilities. Senior Research Associate Fakhruddin Al Kabir said Bangladesh’s energy crisis had reached a serious stage, driven partly by excessive dependence on imports and weaknesses in the existing energy structure.

He said around 84 per cent of Bangladesh’s electricity currently comes from fossil fuels, while renewable energy accounts for only about 4.5 per cent. Heavy dependence on imported fuel places additional pressure on foreign-exchange reserves and leaves the economy exposed to fluctuations in international energy prices.

The policy recommendations included urgent exploration for domestic gas, accelerated development of solar and other renewable energy sources, and the creation of a strategic fuel reserve. The organisation also called for targeted policies to protect lower-income households from the effects of volatile imported fuel prices.

Industry representatives warned that the consequences are already being felt across factories. Bangladesh Chamber of Industries President Anwar-ul Alam Chowdhury Parvez said industrial production had fallen by an estimated 35 to 40 per cent because of the gas and electricity shortages.

He warned that the disruption could damage export competitiveness, particularly if international buyers become concerned about Bangladesh’s ability to maintain reliable production schedules. Industrial consumers, he said, are facing a difficult situation in which they pay substantial bills but still cannot secure adequate fuel supplies. He called for industry to receive the highest priority in gas distribution and urged the government to introduce an emergency rescue package to protect businesses and employment.

CPD Executive Director Fahmida Khatun argued that temporary measures alone would not provide a sustainable solution. She called for a coordinated 10-year energy policy alongside stronger institutional capacity. She also criticised the absence of a properly structured market-based pricing system and targeted subsidies, saying reforms were needed to address longstanding weaknesses in governance and energy management.

Bangladesh Independent Power Producers Association President David Hasnat said severe gas shortages were forcing a large number of gas-fired power plants to remain shut. Declining output from domestic gas fields is adding to the pressure, while new floating LNG terminals require considerable time to develop. He therefore advocated the construction of land-based LNG terminals as part of a longer-term strategy for energy security.

Mustafa Al Mahmud, president of the Bangladesh Sustainable and Renewable Energy Association, called for greater emphasis on renewable power and urged the authorities to remove customs and administrative obstacles that delay the clearance of energy-related equipment at ports. He also proposed tariff incentives for storage technology and suggested converting the country’s approximately 1.3 million diesel-powered irrigation pumps to solar power as a way of reducing fuel consumption.

Energy specialist Professor Ijaz Hossain attributed the current crisis partly to excessive social commitments, weaknesses in pricing policy and system losses. He argued that years of postponing difficult reforms had allowed the problem to accumulate. Increasing supply alone, he said, would not be enough; demand management must also become a central part of energy policy.

Syed Nasim Manzur, a member of the CPD Board of Trustees, called for clear government priorities in allocating scarce energy to industry. He stressed the need for reliable supplies of quality gas and electricity, published load-shedding schedules, lower system losses and stronger incentives for solar storage.

Other speakers at the dialogue included North South University economics professor Sakib Bin Amin and Dhaka University Associate Professor Moshahida Sultana.

The discussion highlighted a central dilemma facing Bangladesh: the immediate crisis requires emergency management, but the country’s longer-term energy security depends on structural reforms. Expanding domestic gas exploration, diversifying LNG infrastructure, developing renewable energy, improving pricing mechanisms, reducing system losses and strengthening demand management will all be necessary if recurring shortages are to be brought under control.

The minister said a comprehensive future plan for the power and energy sector through 2029 would be presented by the Prime Minister during the next session of Parliament. For industries and consumers already struggling with shortages, however, the immediate challenge remains more basic—keeping the system operating until additional supply becomes available.