Home ›› 06 Jul 2022 ›› Front
With a longstanding crisis in gas supply to Bangladesh’s manufacturing sector, the ongoing electricity crisis has put the entrepreneurs in hot water.
The gas shortage is also causing a crisis in power generation as the government fails to supply gas to captive power users and gas-fired power plants with the required pressure forcing the power distributors to go for power cuts.
Production at almost all manufacturing sectors – apparel, textile, ceramics, and food production – dropped by up to 50 per cent in different regions, particularly in Gazipur, Narayanganj, Mymensingh, Dhamrai and Ashulia.
The authorities concerned are yet to come up with an appropriate solution and they are claiming that the problem will not be solved overnight.
“Disruption in gas and electricity supply worsened in recent times. Frequent power cuts are pushing small and medium entrepreneurs toward bankruptcy. Production at textile mills has slowed down for low pressure of the gas,” Anwar-ul Alam Chowdhury Parvez, President of the Bangladesh Chamber of Industries told The Business Post.
He said that most of the electricity-run factories are of small and cottage categories and they could not make business for the past three years for the pandemic. If they fail to continue production in this season, they would lose everything, added Anwar.
Industry insiders said textile, dyeing and washing factories are operated by electricity from captive power plants and their main fuel is natural gas. Only the textile sector has around 1,700 MW captive power plants and such plants need 600mmcfd of gas every day.
Besides, ceramic, bakery and many other factories are also run on gas.
Gas-dependent industries were suffering from gas supply disruption for long and the entrepreneurs allege that the problem peaked in recent times.
Bangladesh Textile Mills Association Vice-president Md Fazlul Haoque said the gas supply shortage lowered their production by around 40 per cent.
“Gas pressure in Narayanganj and Gazipur areas is too low. We’ve been missing shipment deadlines due to the crisis. We don’t know what will happen in future. The government people are claiming that they will not be able to do anything until they could manage enough LNG,” he added.
Muhammad Shahidul Islam, company secretary of RAK Ceramics (Bangladesh), said they were facing a severe gas crisis over the past several months.
“The sudden gas supply shortage is severely hampering our production. Now, we face problems in the supply of both gas and electricity. We have to discard huge quantity of products if the quality is not maintained,” Shahidul said.
According to the Energy and Mineral Resources Division, there is a demand for 3,400 million cubic feet (mmcf) of gas daily in Bangladesh.
On Monday, the Petrobangla could supply only 2,822 mmcfd gas. Of this, 507 mmcfd were imported LNG. Just a month ago, the Petrobangla could supply 692 mmcfd LNG to the national grid.
Now Petrobangla is buying less amount of LNG from the spot market for the financial crisis and rising prices in the international market and the practice has reduced the gas supply by 7 to 8 per cent.
Petrobangla Chairman Nazmul Ahsan told The Business Post that the government imports 57 to 58 cargo vessels of LNG on a long term contract and 13-15 cargo vessels from the spot market every year.
“Due to the price hike in the global market, the government decided to reduce spot LNG import. So, the gas supply is lowered by 200-250 mmcfd. We are trying to increase gas production from domestic sources,” he also added.
“Due to this reason, most of the high-efficiency combined cycle power plants are sitting idle,” he also said.
Meanwhile, most of the manufacturing factories including the apparel sector run on electricity provided by the Power Development Board (PDB) and the Rural Electrification Board (REB).
In recent times, both the boards fail to provide enough electricity which hampers apparel production and export-oriented factories are in fear of missing their shipment deadline.
Even the apparel makers for the local market are also facing a tough time for a drop in production as their prime business time is two Eid festivals. With just four days to Eid-ul-Azha, such apparel makers are filing to meet market demand for the power cuts.
Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, told The Business Post, “Load shedding and gas shortage lowered our production up to 50 per cent based on region. But on an average, our production capacity declined by 20 per cent.”
He said that when they are facing order shortages for global inflation, energy shortage is putting them under new pressure. “On time shipment is mandatory to hold orders. But we will probably miss it. The government should provide enough gas and electricity supply to the export-oriented factories,” he added.
Dhurjati Prasad Sen, member (planning and development) at the Bangladesh Power Development Board (BPDB), however, said more than 1,500 mmcfd of gas is needed to run the gas-fired power plants smoothly but BPDB has received only 974 mmcfd of gas.
Kutub Uddin Ahmed, former president of BGMEA, said buyers were relying on Bangladesh when its competitors were suffering from a severe energy crisis. “If they face the same situation here, they will certainly turn around,” he added.
