Dhaka, June 12 — Bangladesh’s ambitions to accelerate industrialisation are facing a significant setback as an energy shortage linked to the prolonged West Asia conflict disrupts fuel supplies, delays major manufacturing projects and increases costs across the economy.
At an industrial zone near Dhaka, large-scale investments intended to drive the country’s transition into heavy manufacturing remain largely inactive. A newly built glass manufacturing facility and a steel plant, developed with expectations of reliable natural gas availability, have yet to commence full-scale operations due to insufficient fuel supplies.
The projects are part of a broader industrial expansion strategy pursued by some of Bangladesh’s largest business groups, which invested heavily after receiving assurances regarding energy availability. However, the continuing disruption in global gas markets has left several factories unable to begin production despite being technically ready.
Business leaders say the crisis has become one of the biggest obstacles to economic growth at a time when the country is attempting to strengthen its manufacturing base and attract fresh investment. They argue that uncertainty surrounding fuel availability has undermined industrial planning and delayed the expected returns from major capital expenditures.
The situation has been aggravated by the conflict in West Asia, which has disrupted energy supply chains and increased pressure on countries heavily dependent on imports from the Persian Gulf. Bangladesh relies extensively on liquefied natural gas for electricity generation and industrial consumption, making it particularly vulnerable to supply interruptions and price volatility.
Natural gas remains the backbone of the country’s power sector, accounting for a substantial share of electricity generation. With imported LNG supplies constrained, authorities have been compelled to purchase additional cargoes from the spot market at significantly higher prices to meet domestic demand.
While these emergency purchases have helped maintain essential electricity supplies, they have increased the financial burden on the government and energy sector. The higher import bill has also contributed to broader inflationary pressures, affecting businesses and consumers alike.
To manage the shortage, authorities have prioritised gas allocation for power generation and critical sectors such as fertiliser production. However, industrial consumers have faced reduced access to fuel, resulting in lower output and delays in planned expansion projects.
Power rationing has become increasingly common outside major urban centres, with many rural and semi-urban areas experiencing prolonged outages. Officials acknowledge that fuel constraints rather than generation capacity are the primary challenge facing the electricity sector.
The impact of the crisis extends beyond large industries. Small businesses across the country are also struggling with higher operating expenses as electricity tariffs rise and energy costs climb. Many entrepreneurs say they have limited ability to pass on additional expenses to customers due to intense market competition and weak consumer purchasing power.
Faced with growing uncertainty, several industrial groups are accelerating investments in renewable energy. Rooftop solar installations have emerged as a key strategy to reduce dependence on gas fired electricity and lower operating costs.
Major manufacturing companies have announced plans to significantly expand their solar generation capacity, aiming to utilise available rooftop space across factories and warehouses. Industry leaders believe renewable energy can provide greater stability and help mitigate future supply disruptions.
However, experts caution that solar power alone cannot fully replace the country’s dependence on natural gas, particularly for energy-intensive industries. As a result, policymakers are also exploring options to increase domestic gas production and improve energy security.
Attention has turned to newly identified gas reserves within Bangladesh, particularly in the Bhola region. While the discoveries offer long-term potential, infrastructure limitations remain a major challenge. The absence of adequate pipeline networks has slowed efforts to transport gas efficiently from production sites to industrial centres.
Industry representatives have suggested encouraging new manufacturing investments closer to domestic gas fields to reduce transportation costs and improve energy accessibility. Some companies have already acquired land near prospective energy hubs with plans to establish future production facilities.
Meanwhile, the government has introduced measures aimed at reducing energy consumption and controlling costs. These include higher electricity tariffs, conservation campaigns and restrictions on commercial operating hours in urban centres.
The economic consequences are becoming increasingly visible. Inflation has accelerated as businesses absorb higher fuel and electricity expenses, while consumers face rising prices for goods and services. Economists warn that sustained energy shortages could weaken industrial competitiveness and slow economic growth if corrective measures are not implemented quickly.
Analysts note that the crisis highlights the risks associated with heavy dependence on imported fossil fuels. They argue that Bangladesh’s long-term energy strategy will need to balance traditional fuel sources with greater investment in renewable energy, domestic resource development and infrastructure modernisation.
Despite the challenges, business leaders remain optimistic that the current difficulties will encourage structural reforms and accelerate the country’s transition toward a more diversified energy mix. For now, however, industries across Bangladesh continue to navigate an uncertain environment where fuel availability has become one of the most critical determinants of growth and investment.