Gas Shortage Leaves Billions in Industrial Investments Stranded Across Bangladesh
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Bangladesh’s industrial sector is grappling with a severe crisis as billions of dollars in investments remain trapped in dormant factories, primarily due to the state’s failure to provide promised natural gas connections. Major industrial groups, having invested heavily based on government assurances, now find their facilities non-operational, leading to massive financial hemorrhaging and jeopardizing thousands of jobs.
Meghna Group of Industries (MGI) serves as a stark example of this systemic failure. The group invested approximately 7.32 billion taka to establish glass and steel manufacturing plants in the Comilla Economic Zone. Despite completing construction years ago and spending 550 million taka of their own capital to build the necessary gas infrastructure, the plants remain idle. MGI Chairman Mostafa Kamal noted that the group is incurring monthly interest payments of 45 million taka on foreign loans, which cannot be rescheduled or forgiven. The stagnation affects not only these two units but threatens the potential employment of 15,000 workers across the economic zone.
বিজ্ঞাপন
The crisis is widespread, with data from Petrobangla indicating that more than 1,800 applications for industrial gas connections remain pending. About 550 of these applicants have completed all procedural requirements and paid the necessary fees, yet they remain without supply. The Bangladesh Economic Zones Authority (BEZA) has repeatedly petitioned the energy ministry to intervene, highlighting the plight of major players like City Group, which has 14 billion taka worth of infrastructure—including cement, sugar, and paper mills—stalled in Munshiganj’s Hoshendi Economic Zone. Similarly, industry leaders from Ha-Meem Group and T.K. Group report that years of waiting and millions in investments have yielded no results.
The roots of the energy shortage are tied to the previous administration’s policy, which prioritized liquefied natural gas (LNG) imports over domestic exploration. As foreign exchange reserves dwindled and global fuel prices spiked, the government’s reliance on imports became unsustainable. Despite significant hikes in gas tariffs—which increased by as much as 178% for industrial users in early 2023—supply has not improved. Current national demand stands at 3.8 billion cubic feet per day against a supply of only 2.7 billion.
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Energy experts warn that the situation is unlikely to improve in the near term. Dr. Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), suggests that while the government should honor existing commitments to investors, it must refrain from making new promises. He emphasized that the country faces a minimum four-to-five-year window of chronic gas shortages, during which the focus must shift to enhancing domestic exploration, improving energy governance, and integrating renewable alternatives.
The Ministry of Energy and Mineral Resources recently indicated it is considering a tiered approach to address the backlog by partially allocating gas to multiple industrial groups rather than fully powering individual facilities. However, with domestic gas fields depleting at an alarming rate and projections suggesting remaining reserves may last only seven to eight years at current production levels, the path to industrial recovery remains fraught with uncertainty. For now, the nation’s top manufacturers continue to pay millions daily in interest for factories that produce nothing, underscoring a critical bottleneck in the country’s economic development.
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