Gas shortage leaves industries, households in the lurch

Lucky Rani, a resident of the capital’s Moghbazar area, has been making food items for her online business. She has been suffering from a gas crisis recently, which is hampering her production capacity.

She cannot even make breakfast and lunch for her family members as gas is not available from the morning to Afternoon.

Speaking to The Business Post on Tuesday, “I received an order online, and I have to deliver it within 24 hours. But nowadays, I failed to prepare food for myself due to the severe gas shortage. How will I make food for my customers?”

Fakir Fashion, a Narayanganj-based readymade garment factory, has 56 tonnes of dyeing capacity per day. But it is down to 30 tonnes per day due to the zero gas pressure, and the factory is being run by burning diesel and LPG.

The company’s Managing Director Fakir Kamruzzaman Nahid said, “From the last 20 days, we have been receiving zero pressure from the gas line, and now I have to spend Tk 30 lakh in a day to use diesel and gas.

“Nevertheless, my production capacity is down by 50 per cent and I am suffering big losses. While buyers are pressuring me to meet lead time due to the Red Sea crisis, I cannot continue production.”

Many orders are likely to be shifted amid the order crisis situation, we do not know how long the company will survive, he added.

This crisis not only affected Lucky Rani and Kamruzzaman’s lives and livelihoods, but most of the gas users in the capital city, Narayanganj, Gazipur, Ashulia, Savar, Dhamrai, Narsingdi, Munshiganj areas.

Consumers are saying that they are paying the government for air, not gas.

But the government had increased gas prices by up to 179 per cent in early last year, and said that the increased prices will be used to import LNG from the spot market to ensure uninterrupted supply.

Commenting on the issue, Consumers Association of Bangladesh (CAB) Senior Vice-president M Shamsul Alam said, “The gas consumers have been deprived by the government.”

According to Petrobangla, a government-owned national gas company, the country has nearly 4,000 Million cubic feet per day (MMcf/d) gas demand. But the company supplied 2,547.3 MMcf/d on January 16.

Of the supplied gas, 500 MMcf/d arranged from long-term contract LNG and 2,047 MMcf/d came through the domestic sources.

The Petrobangla data showed that they supplied 870.4 MMcf/d to power plants, 209.9 MMcf/d to fertiliser factories, and 1478.9 MMcf/d to households, CNG pumps and industries, which are 34 per cent, 8 per cent and 58 per cent of total supply respectively.

CAB vice president explained that the government increased gas prices last year by up to 179 per cent and assured they will increase gas supply through LNG imports from the spot market. “But the crisis worsened after the price hike.”

The energy expert further said, “The government is supplying a significant per cent of gas to controversial power plants. For this reason, fertiliser factories, industries and households are deprived from gas supply.

“On the other hand, the government also failed to supply quality electricity. While the government failed to supply 40 units of gas to a household, now they are planning to increase the gas price further to fix 60 units. This move will deprive the consumers further.”

On January 18 last year, the government set new gas prices. Before the price hike, the authorities had set a meeting with the industry representatives, and said their aim is to increase gas supply.

During the meeting, factory owners had said they had agreed to pay Tk 22 for per cubic metre (m3) against the previous prices of Tk 11.98 for large, Tk 11.78 for medium, and Tk 10.78 for small, cottage and other industries respectively.

And the amount is enough to raise funds to import LNG from the spot market.

But the government set Tk 30 per m3 gas for all sectors and issued a gazette. They also fixed new prices for the captive, small and commercial power plants at Tk 30 per m3 instead of Tk 16 and the commercial users of gas – such as hotels and restaurants – set at Tk 30.50 instead of previous Tk 26.64 per unit.

The Energy and Mineral Resources Division utilised the new amendment to the Bangladesh Energy Regulatory Commission (BERC) Act, which empowers the government to set all kinds of energy prices bypassing the regulator’s jurisdictions at any time.

Just six months before the price hike, the BERC had raised the average gas prices by 22.78 per cent for retail consumers, except for CNG-run vehicles, in the country with immediate effect.

Energy ministry data shows that the industries used 1,140 MMcf/d gas in February 2022, which was the highest since July last year. Of the figure, captive power plants used 535 MMcf/d and other entities used 605 MMcf/d.

In October 2022, industries used 936 MMcf/d gas. Of the figure, captive plants used 455 MMcf/d and other entities consumed 481 MMcf/d.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice President Fazlee Shamim Ehsan said, “Due to the gas shortage, textile millers failed to supply backward linkage on time. That is why we were forced to import raw materials such as yarn, and fabrics.

“While the country is facing a severe shortage of forex reserves, we spent hundreds of millions of USD to import such raw materials. But if the government increases gas supply through LNG imports, we can save a huge amount of foreign currency amid this crisis.”