Gas, Power and the Growing Threat to Bangladesh’s Economy 

Bangladesh’s worsening energy situation has emerged as another serious warning about the country’s growing energy vulnerability. The crisis is disrupting economic activity, people’s daily lives, industrial production and transportation. In rural areas, prolonged shortages of electricity and gas have created growing hardship, while industries across the country are struggling to maintain production because of inadequate energy supplies.

According to the latest information, gas supply to the national grid has fallen to around 2.03 billion cubic feet (bcf) per day, against normal demand of approximately 3.8 bcf per day. In other words, current supply is roughly half of the country’s requirement. Such a low level of gas supply is reportedly unprecedented in the past 16 years.

The consequences are being felt across the economy. Power generation, industries, residential consumers and other sectors are all facing severe pressure. The Minister for Power, Energy and Mineral Resources has acknowledged the seriousness of the situation, saying that it will take some time to overcome the crisis and that, for the moment, the government has little option but to wait.

The crisis surrounding the LNG terminals at Maheshkhali has further complicated the situation. Gas supplies from the Summit LNG terminal to the national grid were disrupted because of adverse weather conditions. At the same time, complications surrounding the receipt of an LNG cargo supplied by Saudi Aramco created additional uncertainty over imported gas supplies.

Earlier, damage to Excelerate Energy’s LNG terminal following a fire had increased Bangladesh’s dependence on the Summit terminal. As a result, a problem at a single terminal has had consequences for the entire national energy system.

Bangladesh now needs an integrated, realistic and forward-looking energy policy covering domestic gas exploration, new gas wells, production capacity, LNG import infrastructure, renewable energy, energy efficiency, and transmission and distribution modernisation.

This raises a fundamental question: Why should the energy security of an entire country remain so dependent on such a limited and vulnerable infrastructure network?

Government officials say gas supplies to power plants have been increased amid the shortage. Under normal circumstances, power plants receive around 680 million cubic feet of gas per day. That figure has now risen to approximately 1 billion cubic feet per day.

The move has helped maintain electricity generation to some extent, but it has come at a significant cost to industries, households and other consumers. Gas supplies to these sectors, which stood at around 1.6-1.65 billion cubic feet per day just three weeks ago, have now fallen to roughly 850 million cubic feet.

Prioritising power generation may appear reasonable as an immediate crisis-management measure. But the long-term economic cost could be enormous. When factories are forced to shut down because of gas shortages, the damage extends far beyond lost production. Employment, exports, investment, supply chains and government revenues are all affected. Industrial entrepreneurs have already reported that production has fallen by 40-45 per cent because of shortages of gas and electricity.

The risk is particularly serious for readymade garments, textiles, dyeing, spinning, steel, glass, ceramics and other energy-intensive industries. Many of these industries require uninterrupted energy supplies. Once production stops, returning to full capacity is not always easy.

For industries such as glass manufacturing, shutting down furnaces can cause severe technical and financial damage and may require substantial investment to restart operations. What begins as a temporary gas shortage can therefore become a long-term financial crisis for individual businesses.

Perhaps even more worrying is that the energy crisis is now returning to the electricity sector. Load-shedding has already begun in different parts of Dhaka, while a significant gap between electricity demand and supply is emerging at the national level.

This demonstrates that increasing gas supplies to power plants alone is not enough to resolve the broader problem. Even after diverting more gas to electricity generation, Bangladesh is struggling to maintain a fully stable power supply. The present situation is therefore no longer simply a gas crisis. It is an interconnected gas-and-electricity crisis, in which problems in one sector are rapidly affecting the other.

The government must take several immediate steps to stabilise the situation. First, LNG supplies must be restored as quickly as possible. Although there may be opportunities to add new cargoes through the Summit terminal, depending on a single additional cargo cannot provide a sustainable solution. The damaged Excelerate terminal must also be restored to full operational capacity as soon as possible.

At the same time, Bangladesh needs better preparation for LNG imports, with cargo reception, insurance, contracts and supply-chain management properly coordinated. More importantly, the country needs a long-term energy strategy centred on domestic gas exploration, new gas fields, expanded LNG infrastructure and alternative energy sources. Overdependence on imported LNG leaves Bangladesh vulnerable to market volatility, supply disruptions, shipping problems and geopolitical risks.

The government also needs a transparent and predictable gas allocation policy. Electricity generation is important, but depriving industries of gas for extended periods is not sustainable. If industrial production falls, lower electricity demand may simply indicate a contracting economy. The government should therefore introduce an emergency energy plan for industries alongside immediate crisis management.

Businesses need clear information about how much gas will be available, which sectors will receive priority, how long the shortages may continue and how industrial operators should prepare. Uncertainty can sometimes be more damaging to investment and business confidence than the shortage itself. Investors cannot make rational decisions when they do not know whether factories will receive adequate gas and electricity tomorrow, next week or next month. A predictable energy supply is fundamental to industrial investment, export competitiveness and employment.

The current gas and electricity crisis has exposed weaknesses in Bangladesh’s long-term energy planning. Repeatedly relying on temporary measures to manage short-term shortages is not a sustainable strategy.

Bangladesh now needs an integrated, realistic and forward-looking energy policy covering domestic gas exploration, new gas wells, production capacity, LNG import infrastructure, renewable energy, energy efficiency, and transmission and distribution modernisation.

These elements cannot be planned separately. They must form part of a coordinated national energy-security strategy. Keeping industries closed in order to maintain electricity generation is not a sustainable solution. At the same time, maintaining industrial production while ignoring electricity shortages is equally unrealistic.

The government must therefore treat gas and electricity not as two separate policy challenges but as interconnected pillars of the national economy.

Bangladesh’s current energy crisis should be recognised as a major warning signal for the country’s future energy security. The immediate priority is to stabilise gas and electricity supplies. But the larger task is to build an energy system that is diversified, resilient, affordable and capable of supporting Bangladesh’s economic growth.