Bangladesh Gas Crisis: Most Heavy Industries Halt Production as Energy Shortage Deepens
Bangladesh’s worsening gas crisis is now hitting the country’s heavy industrial sector particularly hard, with many factories either halting production or operating far below capacity because of inadequate gas pressure. Steel, cement, glass and other gas-dependent industries in Chattogram are facing growing difficulties, raising concerns over production costs, investment and the country’s broader industrial competitiveness.
The problem is not simply a temporary shortage at individual factories. Bangladesh’s industrial sector is increasingly exposed to a structural gap between gas demand and available supply, while disruptions at LNG infrastructure have made the situation more severe.
For businesses that depend on continuous furnace, boiler or captive-power operations, unreliable gas supply can be especially damaging because restarting equipment is costly and production cannot always resume immediately when pressure improves.
Why Heavy Industries Are Struggling
Chattogram is one of Bangladesh’s most important industrial centres, particularly for steel, cement, glass and related manufacturing.
According to reporting from Prothom Alo, the region has around 1,200 small and large factories receiving gas from Karnaphuli Gas Distribution Company Limited (KGDCL). Total gas demand in Chattogram is estimated at roughly 300–320 million cubic feet per day, while industrial users alone require around 80–100 million cubic feet. However, available supply has been insufficient to meet industrial demand.
The consequences are already visible on factory floors.
Many heavy industries are struggling to operate at even half of their normal capacity, while some facilities have temporarily stopped production altogether.
The situation became particularly acute after gas supply from an LNG terminal at Maheshkhali was disrupted by a technical fault. Although supply was later restored, gas pressure remained too weak for many factories to return to normal operations.
Steel Industry Faces a Direct Hit
The steel sector is among the industries most exposed to the gas shortage.
Chattogram’s factories supply more than 70% of Bangladesh’s rod demand, making the region strategically important for the construction sector. Four major steel groups — BSRM Group, Abul Khair Group, KSRM Group and GPH Ispat — have major operations in the area. Company officials told Prothom Alo that production at their factories had fallen by roughly 30–35% amid the prolonged gas shortage.
The problem becomes more complicated when furnaces are involved.
Golden Steel, a medium-sized rod manufacturer in Sitakunda with a production capacity of about 600 tonnes per day, had to stop production during the gas disruption. Another factory, HM Steel, which has capacity of around 1,000 tonnes per day, was reportedly operating at only about half capacity.
Low gas pressure also means furnaces take substantially longer to heat.
A representative of Mostafa Hakim Group said furnace heating that previously took about 40 minutes could take two to two-and-a-half hours under weak gas pressure. The company estimated that the gas shortage was raising production costs by 15–20%.
That is a major issue in a competitive commodity industry where producers have limited ability to pass every additional cost on to customers.
Cement and Glass Manufacturers Are Also Under Pressure
The impact is not limited to steel.
Cement manufacturers in Chattogram use gas for captive power generation and for processes such as drying slag and other raw materials. With gas pressure too low to operate gas generators effectively, factories have had to rely more heavily on electricity and alternative energy sources, increasing operating costs.
The glass industry faces another kind of risk.
Glass furnaces need to maintain high temperatures and stable operating conditions. Frequent interruptions or inadequate gas pressure can affect production quality as well as operating efficiency.
PHP Float Glass, one of the glass manufacturers in Chattogram, has reported difficulties maintaining furnace operations because of the gas shortage.
For such industries, simply switching off a furnace is not comparable to stopping an ordinary production line. Restarting can consume additional fuel and time, while prolonged disruption can potentially affect equipment and output quality.
The Crisis Is Bigger Than One LNG Terminal
The latest disruption has exposed a wider weakness in Bangladesh’s energy system.
The country has become increasingly dependent on imported LNG as domestic natural-gas production declines. A technical problem at one floating LNG terminal earlier in July cut roughly 450 million cubic feet per day from national gas supply, according to Bangladesh’s Energy and Mineral Resources Division.
Before that disruption, Petrobangla data cited by The Daily Star showed national gas supply at about 2,620 million cubic feet per day, against demand of approximately 3,800 million cubic feet per day. The terminal shutdown pushed supply down to around 2,170 million cubic feet per day.
That existing deficit explains why a disruption at a single LNG facility can quickly spread across the economy.
Gas is needed not only by factories but also by power plants, CNG stations and households. When supply is reduced, industries compete for a smaller pool of available gas.
Alternative Fuel Is Raising Costs
Some manufacturers are attempting to keep production running by switching to alternative fuels.
Steel producers, for example, have used fuel oil to maintain certain operations when gas pressure is inadequate. But alternative fuel is significantly more expensive, meaning factories can continue producing only at a higher cost.
The broader industrial sector is facing a similar problem.
A recent Daily Star report found that some factories were switching to diesel because of the gas shortage, with energy costs rising sharply. One food-processing company reported production falling by 30–40%, while diesel-generated electricity was substantially more expensive than gas-based generation.
For exporters, this creates a difficult choice: absorb the additional cost, reduce production or risk missing delivery deadlines.
Export Competitiveness Could Become a Concern
Bangladesh’s industrial economy depends heavily on reliable energy supply.
Garments and textiles are particularly sensitive because production schedules are closely linked to export orders. The gas crisis has already disrupted factories in major industrial zones, while industry groups have warned about delayed shipments and rising production costs.
Heavy industries face a similar challenge.
If steel, cement and glass manufacturers repeatedly operate below capacity, their fixed costs are spread over fewer units of production. That can squeeze margins even if selling prices remain unchanged.
Over time, persistent energy uncertainty could also influence investment decisions. Businesses planning large factories need confidence that electricity and gas will be available after the investment is made.
Why the Problem Could Affect New Investment
The government has already frozen new industrial gas connections and load increases amid the worsening supply shortage.
A July decision placed 1,857 pending applications for new gas connections on hold, while officials and industry representatives warned that billions of taka worth of industrial projects were waiting for gas.
This creates a difficult cycle:
Less domestic gas → greater LNG dependence → supply disruptions → lower industrial output → higher production costs → weaker investment incentives.
Breaking that cycle will require more than repairing individual LNG facilities.
What Happens Next?
The immediate priority is to restore stable LNG supplies and improve gas pressure across industrial zones.
But the longer-term solution is more complicated. Bangladesh needs greater reliability from its LNG infrastructure while also addressing declining domestic gas production and expanding energy diversification.
The government has indicated that additional gas supply and improved reliability are priorities, but industry groups argue that alternative arrangements are needed before a fully stable supply system is achieved.
For businesses and investors, the key indicators to monitor are:
- Gas pressure in major industrial zones
- LNG terminal operating capacity
- Domestic gas production trends
- Industrial capacity utilisation
- Steel, cement and glass production
- Electricity availability and load-shedding
- Alternative-fuel costs
- New industrial gas connections
- Export order and shipment trends
What This Means for Bangladesh’s Economy
The heavy-industry slowdown is important because steel, cement and glass sit near the foundation of construction and manufacturing activity.
Lower production can eventually affect construction costs, infrastructure projects, employment, bank loan servicing and demand for imported raw materials.
The immediate impact may be concentrated among factories, but if the shortage continues, the economic consequences can spread much further.
The central issue is therefore not simply whether a factory can operate today. It is whether Bangladesh can provide predictable and competitively priced energy to industries that have already invested heavily in the country.
Final Takeaway
Bangladesh’s gas shortage has pushed many heavy industries in Chattogram into a difficult operating environment, with some factories halting production and others running at sharply reduced capacity. Steel manufacturers are among the hardest hit, while cement and glass producers are also facing higher costs and operational challenges.
The immediate trigger has been disruption in LNG supply, but the deeper problem is the widening gap between domestic gas availability and industrial demand. If the shortage persists, the consequences could extend beyond factory output to investment, employment, exports and economic growth.
The next major signal will be whether Bangladesh can restore stable gas pressure while reducing its vulnerability to individual LNG-terminal disruptions.
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