Bangladesh’s worsening fuel shortage is emerging as a major risk to industrial activity, business confidence and broader economic growth, with factories across the country reportedly losing around Tk 2,387 crore in production every day.
The impact is no longer confined to large industrial plants. Pharmaceutical manufacturers, textile and dyeing units, ceramic producers, sugar refineries, small and medium-sized enterprises and service-sector businesses are also facing disruptions as unreliable gas and electricity supplies make it increasingly difficult to maintain regular production.
The figures were presented in a keynote paper at a roundtable discussion titled ‘Bangladesh’s Power and Energy Challenges: Ensuring Reliable Infrastructure for a Better Business Environment’, held on Sunday at the Metropolitan Chamber of Commerce and Industry (MCCI) conference room in Gulshan, Dhaka.
The event was jointly organised by Policy Exchange Bangladesh and MCCI, with support from the Australian Government’s Department of Foreign Affairs and Trade. MCCI president Kamran T. Rahman chaired the discussion, while Federation of Bangladesh Chambers of Commerce and Industry administrator Fazlul Hoque attended as the chief guest. Dr M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, moderated the session. The keynote paper was presented by Hasib Hasan, senior associate at Policy Exchange.
Industrial growth under pressure
According to the paper, growth in Bangladesh’s manufacturing sector fell to 2.86 per cent in the 2025-26 financial year, down from 3.71 per cent in the previous financial year.
The slowdown comes as industries struggle with inadequate gas pressure, interruptions in electricity supply and the rising cost of alternative fuels. For manufacturers, these disruptions can affect not only production volumes but also delivery schedules, operating costs and the ability to fulfil export orders.
The paper estimated that industrial production across Bangladesh is losing about Tk 2,387 crore every day because of the energy shortage. The losses are particularly severe in major industrial centres including Chattogram, Narayanganj, Gazipur, Habiganj and Mymensingh.
Severe disruption in industrial zones
Narsingdi has been among the worst-affected areas, with more than 300 factories reportedly closed. The district has around 3,000 textile and dyeing mills, which together supply roughly 70 per cent of the country’s local fabric demand. Some factories have reportedly resorted to using wood to operate boilers as a substitute for gas.
The situation in Gazipur is also critical. Industrial consumers there require around 590-600 million cubic feet of gas a day, but receive only about 250-270 million cubic feet. That means supply is meeting roughly 45 per cent of demand. Between 18 and 22 per cent of factories in the area have reportedly been forced to suspend operations.
In Narayanganj, around 900 of approximately 1,850 factories are said to be closed, leaving nearly 49 per cent of the industrial base outside production.
Mymensingh is experiencing a similar squeeze. Of the 293 industrial units in the district, 99 depend on gas, and average production has fallen by around 50 per cent.
Habiganj has suffered another major setback, with 171 factories affected by the complete suspension of gas supplies. The daily production loss in the district is estimated at more than Tk 1,000 crore.
Chattogram has also seen industrial capacity decline by around 25 per cent, while production in the knitwear and dyeing sectors nationwide has fallen by between 30 and 50 per cent, according to the paper.
Rising dependence on imported energy
The keynote presentation also highlighted a growing dependence on imported energy. Bangladesh’s reliance on imported fuel has increased from 47.7 per cent to 62.5 per cent over the past four years.
That dependence leaves the economy more exposed to international price movements and disruptions in global supply. When international fuel markets become volatile, higher procurement costs can eventually feed into domestic production expenses, placing additional pressure on businesses already operating under tight margins.
The issue is particularly significant for export-oriented industries, where producers have limited scope to pass higher energy costs on to overseas buyers. Uncertainty over the availability and price of energy can also make it harder for companies to plan new investment or expand existing facilities.
Tk 35,000 crore in investment held up
The energy shortage is also affecting prospective industrial investment. A total of 1,857 applications for new gas connections remain pending, according to the presentation. Together, these applications are linked to around Tk 35,000 crore in industrial investment.
The delay means that the energy shortage is affecting both existing production and potential future capacity. For investors, uncertainty over whether adequate gas supplies will be available can become a major consideration when deciding whether to establish or expand a factory.
Small and medium-sized enterprises are facing their own difficulties. Production in this segment has declined by an estimated 25 to 30 per cent, according to the discussion.
Business leaders call for predictable supply
Business leaders at the roundtable said unreliable gas and electricity supplies were directly undermining the competitiveness of Bangladeshi industries.
Lower gas pressure can interrupt production, while frequent power disruptions can force factories to stop and restart machinery repeatedly. Businesses that turn to alternative fuels face additional operating costs, further weakening their competitive position, particularly in export-oriented sectors.
Participants called for priority energy allocation for export-focused industries and major industrial zones. They also urged the authorities to publish advance and reliable load-shedding schedules so that factories can adjust production plans, labour arrangements and machinery use accordingly.
Shawkat Aziz Russell, president of the Bangladesh Textile Mills Association, said the current crisis reflected weaknesses in long-term planning and energy procurement. He called for an industrial energy policy and immediate measures to protect manufacturing and export-oriented sectors.
Mohammad Iqbal Chowdhury, director and chief executive officer of LafargeHolcim, stressed the need for a credible and predictable long-term energy plan to protect existing industrial investment. He advocated a clear 10- to 20-year energy strategy that takes competitiveness and sustainable development into account.
Moinul Islam, president of the Bangladesh Ceramic Manufacturers and Exporters Association, said gas was not merely a source of energy for the ceramic industry but also an important part of the production process. Continued uncertainty in supply, he warned, could put production, employment and investment at risk.
Professor Dr Ijaz Hossain, chairman of ESTex Foundation, said the energy crisis should not be viewed solely as a supply problem. He called for greater attention to energy pricing, allocation, renewable energy, efficiency and a realistic energy mix.
Calls for broader energy strategy
The roundtable recommended strengthening energy security while making gas and electricity supplies more reliable and predictable. Participants also called for greater domestic energy exploration, faster adoption of renewable energy and stronger coordination between the public and private sectors.
Predictability emerged as a central concern throughout the discussion. Businesses need to know not only whether energy will be available, but also how much it will cost and how reliably it can be supplied. Without that certainty, long-term investment decisions and production planning become more difficult.
The recommendations therefore went beyond addressing the immediate shortage. They included protecting existing investments, restoring confidence among prospective investors, improving the reliability of energy supplies and developing a longer-term strategy capable of supporting industrial expansion.
With daily production losses estimated at Tk 2,387 crore and tens of thousands of crores in potential investment tied to pending gas connections, the energy crisis is placing pressure on both present industrial activity and future economic growth. The discussion underscored the need for immediate measures alongside a longer-term energy strategy to provide businesses with a more stable and predictable operating environment.
