The Moheshkhali Outage Drives a 40 to 60 Percent Production Collapse, Mandating Emergency Gas Rationing, Diesel Credit, and Industrial Power Priority

Situation

A fire incident on July 21, 2026, at the Moheshkhali Floating Storage and Regasification Unit operated by Excelerate Energy cut daily national gas supply by 450 to 500 million cubic feet [The Daily Star, Prothom Alo, The Business Standard, bdnews24, and Dhaka Tribune, August 3, 2026]. Overall daily gas availability fell to 2.15 to 2.2 billion cubic feet against demand of 3.8 to 4 billion cubic feet [ibid.]. The Prime Minister’s Information and Broadcasting Adviser stated on August 4 that while the accident was not major, it crippled the terminal’s full capacity [The Daily Star, Prothom Alo, The Business Standard, bdnews24, and Dhaka Tribune, August 4, 2026]. Within two weeks, manufacturing output in the Narayanganj, Savar, Ashulia, and Gazipur corridors plummeted 40 to 60 percent [August 3 sources, ibid.], directly threatening export commitments and shipment deadlines. This is no longer an isolated energy disruption; it is an acute industrial emergency that demands coordinated supply-side and financial intervention.

Evidence

The FSRU outage removed 450 to 500 mmcfd from the national grid, compressing total supply to roughly 2.15 to 2.2 bcf against a daily demand of 3.8 to 4 bcf [The Daily Star, Prothom Alo, The Business Standard, bdnews24, and Dhaka Tribune, August 3, 2026]. Industrial production across all major hubs registered a 40 to 60 percent decline over two weeks [ibid.]. In Narayanganj, at least 85 dyeing units and 65 garment factories are directly affected, with many receiving zero gas or line pressure of only 2 to 4 psi, far below operational thresholds [ibid.]. Manufacturers are paying a Tk 10 per litre premium for diesel at filling stations [ibid.]. Spinning mills report daily diesel expenses of Tk 90 lakh, compared with normal gas bills of about Tk 20 lakh [ibid.]. Sector-wide operating costs have jumped by roughly 20 percent [ibid.]. On the power side, load-shedding regularly exceeded 3,000 MW in early morning hours, and oil-fired plants, while providing just 16 percent of total electricity, absorbed 39 percent of total fuel and power-import expenses [ibid.]. The average generation cost of oil-fired electricity reached Tk 18.59 per kWh, more than five times the Tk 3.48 cost of gas-driven power [ibid.].

Prescription

1. Repair enforcement with public transparency. The Ministry of Power, Energy and Mineral Resources, through Petrobangla, must immediately secure a binding repair and restart schedule from Excelerate Energy and publish progress updates every 48 hours. Without a credible timeline, all downstream rationing and financial measures will lack a definitive endpoint.
2. Emergency gas allocation protocol. The Ministry of Industries, jointly with Petrobangla, should issue a statutory order reallocating gas away from non-essential industrial and commercial consumers to export-oriented textile, dyeing, and spinning units. The protocol must restore gas supply to operational pressure levels for priority users, temporarily suspending service to sectors whose output is not tied to immediate export receipts. The allocation will remain in force until the FSRU resumes full throughput and supply crosses the 2.5 bcf threshold.
3. Diesel cost relief through a targeted working capital credit facility. Bangladesh Bank should instruct scheduled banks to operate a special credit line for verified gas-dependent export manufacturers. The facility will cover the documented incremental fuel cost above their pre-crisis gas bill, secured against confirmed export letters of credit, at a fixed 2 percent interest rate, with mandatory repayment from export proceeds within 120 days of shipment. To reinforce the measure, the National Board of Revenue should waive the Tk 10 per litre diesel premium that has emerged at filling stations [The Daily Star, Prothom Alo, The Business Standard, bdnews24, and Dhaka Tribune, August 3, 2026] for facility users, absorbing the foregone revenue as a temporary fiscal cost.
4. Industrial-priority power dispatch protocol. The Power Division, PDB, and Power Grid Bangladesh must impose a revised load-shedding schedule that protects dedicated industrial feeders in the affected manufacturing corridors. During business hours, residential and commercial feeders should be limited to no more than 60 percent of connected load, while designated industrial blocks receive near-full supply. To contain the fiscal drain, the dispatch order must curtail the most expensive oil-fired units, accepting higher urban residential outages as a deliberate trade-off until gas-based generation recovers.

Risks and tradeoffs

The repair timeline is wholly dependent on Excelerate Energy’s assessment and may extend well beyond initial projections if internal damage is extensive. The emergency gas allocation will face resistance from non-export sectors and could trigger layoffs in less protected industries. The credit backstop, unless tightly administered, may absorb bank liquidity that is already strained and create contingent liabilities. Waiving the informal diesel premium risks legitimising an illicit practice and demands rigorous NBR monitoring to prevent revenue diversion. The residential load-shedding increase will generate public discontent; the government must pair the protocol with a clear sunset clause and a public communication campaign that links the sacrifice to the FSRU restart date.

Bottom line

The Moheshkhali terminal shutdown has vaporised 450 to 500 mmcfd of gas, halved factory output in core manufacturing hubs with 40 to 60 percent production losses [The Daily Star, Prothom Alo, The Business Standard, bdnews24, and Dhaka Tribune, August 3, 2026], and surged operating costs by 20 percent [ibid.], imperilling export shipments. A sequenced response combining enforced repair transparency, emergency gas allocation to export industries, a Bangladesh Bank credit facility for diesel substitution, and an industrial-first power dispatch order is the only pragmatic path to contain the damage while the terminal remains offline.